Real-time payment transactions in Nigeria jumped 95% in 2021 –
Nigeria looks to real-time payments to help drive economic growth and financial inclusion, with real-time transaction volume increasing year-on-year by 94.7% to 3.7 billion in 2021, according to a recent Prime Time for a real-time report.
The report in its third edition was published by ACI Worldwide, in partnership with GlobalData, a leading data and analytics company, and the Center for Economics and Business Research.
It tracks real-time payments volumes and growth in 53 countries, including an economic impact study that provides a comprehensive view of the economic benefits of real-time payments for consumers, businesses and the wider economy. in 30 countries.
Further analysis of the report also showed that in the ranking of the most developed real-time payments markets in the world, the country ranks sixth behind South Korea (7.3 billion), Brazil (8, 7 billion), Thailand (9.7 billion), China (18.5 billion). million) and India (48.6 billion).
A real-time payment is a payment processing network used to send money electronically. It offers consumers and businesses cheaper, faster and more efficient ways to pay.
“Nigeria is one of the countries where real-time payments offer the greatest opportunities for economic growth. Its transactions in 2021 resulted in estimated cost savings of $296 million for businesses and consumers. This unlocked $3.2 billion in additional economic output, representing 0.7% of the country’s GDP,” the report said.
He also said that with real-time transactions expected to reach 8.8 billion in 2026, net savings for consumers and businesses are expected to climb to $2.3 billion.
“This would help generate an additional $6 billion in economic output, equivalent to 1.01% of the country’s projected GDP.”
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ACI’s Worldwide analysts also noted that the country, which is traditionally a cash economy with a growing population, expects higher speeds, greater simplicity and modern thinking from financial service providers. .
“Cash is still king, but this shift demonstrates the success of government regulators in fostering rapid growth in digital openness, especially payments. There is now a continued drive in the country to extend this momentum to cross-border use cases,” they added.
In Africa’s largest economy, NIBSS Instant Payments (NIP) is the country’s real-time payment system. Launched and developed by Nigeria Inter-Bank Settlement System (NIBSS) in 2011, NIP is an account number-based real-time online interbank payment solution.
And over the years, Nigerian banks have exposed the PIN through their various channels i.e. internet banking, bank branches, kiosks, mobile applications, Unstructured Supplementary Service Data (USSD), points of sale (POS), automatic teller machines (ATM), etc. .to their customers.
According to the NIBSS, PIN volume increased to 1.4 billion in the four months of 2022, representing a 4% increase from over 999 million recorded in the same period last year. .
“The COVID-19 pandemic has also encouraged consumers to switch from cash to electronic payment methods, which has further supported the growth of real-time payments,” the report points out.
He further added that the NIBSS launched NQR, a national interoperable QR code standard in March 2021 to facilitate instant P2B and P2P payments by scanning QR codes.
“This will further catapult the use of real-time payments, helping it register a CAGR of 18.6% from 2021 to 2026 in terms of volume.”
Wole Abegunde, Chairman of e-tranzact, said the Nigerian e-payments industry is still poised for continued growth as alternative payment channels evolve, even with more and more players offering payments. without touching.
“Favorable demographics and regulatory support are major enablers and grounds for expectation of accelerated growth in the industry.”
Globally, real-time transaction growth increased by 64.5% to 427.7 billion in 2021, from 118.3 billion in 2020. By region, South and Central America with 51.3%, Middle East, Africa and South Asia (32.6%), North America (30.2%), Europe (23.0%) and Asia-Pacific (15.0%) record growth fastest real-time transactions.
The report recommends that in thinking about a strategy for 2022 and beyond, banks in the African region must position themselves to respond to changing and shifting consumer payment behaviors and greater cross-border interoperability.
“Banks should therefore view the market as entering a new phase of strong opportunity and assess whether the technology they are currently using is fit for purpose.
“Rather than thinking of an account-based system, a card-based system and an EFT platform, they should move to a service-based architecture with a central platform where services are consumed regardless of or the channel from which a request is initiated.
“This is all long-term thinking. Since regulations will dictate at least part of this journey, it is up to banks to seize the moment and build beyond today’s short-term demands. This will help them build a business strategy that is future-proof and more fully aligned with the needs of modern Nigeria,” he concluded.