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E-payment: Nigeria’s PoS deals hit 3.2trn in 2019

Electronic payments through the Point of Sales (PoS) terminals maintained its growth trajectory in 2019 as Nigerians spent N3.2 trillion over the platform. This was almost N1 trillion higher than N2.3 trillion transactions recorded in 2018 and it represented 28 per cent year-on-year growth.

A look at the value of PoS transactions in 2017 also showed the electronic payment channel has maintained steady growth over the last three years, as the 2018 figure also showed a significant increase over N1.4trillion recorded in 2017.

The electronic transaction data released by the Nigerian Inter-Bank Settlement Systems (NIBSS), showed the PoS channel remained Nigerians’ favourite for transactions in the year. This was in spite of the introduction of the N50 stamp duty on PoS transactions towards the end of the year.

According to the NIBSS’ report, the volume of PoS transactions in the year stood at 438.6 million. This also indicated 53 per cent growth over 285.9 million deals recorded in the previous year 2018.

Analysis of monthly statistics for the year 2019 showed that transactions worth N222.9 billion were carried out over the electronic platform in January, while N193.4 billion was recorded in February. In March and April, N217.4 billion and N246 billion were recorded respectively. Nigerians spent N257.7 billion over PoS terminals in May while N245.9 billion was recorded in June.

In July, the value of PoS transactions stood at N279.4 billion, while the highest transaction value in the 10-month period was recorded in  August as Nigerians transacted businesses worth N294 billion over the platform. Transactions value for September and October stood at N283.3 billion and N287.7 billion respectively.

In November, Nigerians transacted businesses valued at N303.8 billion over the PoS machines while the figure hit N372.2 billion in December, reflecting increased spending during the festive period.

There was also an increase in demand for PoS machines by merchants in the year as the NIBSS data showed that registered terminals in the country rose from 2.4 million in 2018 to 3.6 million in 2019. This also indicated that about 1.2 million new PoS machines were registered in the year under review.

However, the gap between registered and deployed machines remained unclosed as the NIBSS statistics showed that only 3 million PoS terminals had been deployed by the end of 2019 out of the 3.6 million registered. This means that about 600,000 machines are yet to be put to use by the merchants.

Meanwhile, with a new directive from the Central Bank of Nigeria (CBN) aimed at easing the use of PoS for consumers, industry analysts see further growth in the e-payment system this year. The apex in the new directive issued early January said it had upgraded the use of the PoS by merchants or other users and the new rule is particular to messages displayed by the PoS during transactions. Hence, it mandated the merchants to obtain Acquirer Device Validation certification or the applicable testing completion notification from its licensed card schemes.

This new directive came barely a month after the CBN ordered that customers should no longer be charged N50 for transactions on the PoS.

In a statement signed by Director, Payment System Management Department, CBN, Musa Jimoh, “By this directive, all PoS terminal must have the capability for transaction pre-authorisation and sales completion. All card issuers are required to build the capability and enable the processes for pre-authorisation and sales-completion of transactions. Card schemes are also required to provide online simulators for acquirers and issuers to test their systems, when necessary.”

The bank said this became necessary because it had identified the predominant use of a single messaging format for POS transactions as an obstacle to the use of pre-authorisation as a mode of payment in Nigeria. The deadline to meet the directive is set for July 31, 2020, but the directive takes immediate effect.

 

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