Cash Crunch Pushes e-Payments To All-time High, Transactions Hit N1.07 Quadrillion

The value of instant electronic transactions consummated by financial institutions in Nigeria in 2024 hit an all time high of N1.078 quadrillion, signaling a historic milestone in the country’s shift toward digital payments.

This is as the active bank accounts in the country rose to 311.649 million at the end of last year.
The surge, which represents a 79.6 per cent increase from the N600 trillion recorded in 2023, is largely attributed to the lingering cash shortage and the Central Bank of Nigeria’s (CBN) cashless policy.

According to data just released by the Nigerian Inter Bank Settlement System (NIBSS) the value of NIBSS Instant Payment (NIP) in 2024 rose by 79.6 per cent compared to N600.349 trillion that was recorded in 2023.

According to NIBSS, electronic payments saw consistent growth throughout the year, peaking in December at N115.1 trillion as Nigerians ramped up spending during the festive season. This marked the highest monthly transaction value ever recorded on the platform.

Beyond transaction value, the volume of e-payments also rose significantly, climbing from 9.7 billion in 2023 to 11.2 billion in 2024, a 15.5 per cent increase year over year.

Industry analysts link the rapid adoption of digital payments to the CBN’s cash withdrawal limits, which cap individual weekly withdrawals at N500,000 and corporate withdrawals at N5 million.

This policy, which took effect in early 2023, has pushed many Nigerians to rely more on electronic transfers, mobile banking, and PoS transactions.

However, the volume of transactions also increased in2024 compared to what was recorded in 2023, as the volume of transactions in 2024 stood at 11.27 billion as against 9.669 billion that was recorded in 2023. The highest transaction volume was recorded in May last year while the highest transaction value was recorded in December.

Similarly, Point of Sale (POS) transactions had an uptick last year with value of transaction hitting a record N18.146 trillion as against N10.736 trillion recorded in 2023. The volume of the transactions also rose from 1.386 billion in 2023 to 1.454 billion in 2024.

POS transactions had seen a particularly high volume and value in November and December last year as bank customers had to resort to banking agents to access cash amidst a cash scarcity. Also, the rise in the use of POS is not unconnected to the service disruptions that many banks encountered last year.

The number of POS terminals deployed had risen to 5.56 million at the end of last year compared to 2.448 million which had been deployed in 2023. The sharp increase in POS transactions between November and December last year can also be traced to a sharp increase in deployment which rose sharply from 3.23 million in September to 4.86 million in October last year.

Likewise the number of registered POS terminals had spiked in October last year to 6.8 million from 4.3 million. At the end of last year, a total of 7.78 million POS terminals were registered compared to 3.48 million that was registered at the end of 2023.

Meanwhile the number of active bank accounts in the country has risen to 311.649 million according to the NIBSS data from 209.311 million which it was at the beginning of the year. The number of active accounts had seen a sharp increase in the month of September last year when it rose from 233.23 million to 291.641 million.

This means that 102.33 million new accounts had been opened in the course of last year. Banks also saw some accounts closed as a total of 3.77 million accounts were closed between January and December last year.

Total unique Bank Verification Number (BVN) issued had also risen in the course of last year as the BVN enrollment count stood at 63.47 million in 2024. The figure this month according to NIBSS stands at 64.921 million. So far, BVN enrolment had increased by 25.1 per cent since 2021 when the figure stood at 51.9 million.