Nigerians conducted N2.033 trillion electronic funds transfers in 2020 despite economic recession, the many months of lockdown as a result of the COVID-19 pandemic, and the harsh economic conditions it caused.
The rise in electronic banking transfer, according to findings, could be connected to the three months nationwide lockdown announced by the Federal Government (FG) to curb the spread of coronavirus pandemic, hence, Nigerians resort to e-payment channels to conduct their banking transactions.
Of this transaction, Lagos State accounted for the highest volume of electronic channels while Jigawa recorded the lowest volume.
Based on the data released by the Nigeria Inter Bank Settlement System (NIBSS), despite recording the lowest volume in transaction, data showed that Jigawa recorded the highest growth in transaction volume which was up by 87 per cent. Compared to 3.04 million volume recorded in 2019, Jigawa recorded 6.35 million transactions last year accounting for 0.3 per cent of total transaction.
Lagos State, which had the highest volume, recorded 561.52 million transactions in 2020 compared to 339.01 million transactions recorded in 2019 although its percentage of total volume dropped slightly from 29.9 per cent to 29.8 per cent last year.
NIBSS noted that mobile remain the preferred channel with 43 per cent of total transactions, while USSD remains a close second with 35 per cent of transactions. These remain largely unchanged from 2019. This indicates that 78 per cent of total transfer transactions were carried out using a mobile device.
There was a 10 per cent spike in Internet banking transactions, attributed to the move away from physical channels, and the branch closures experienced in key commercial hubs in the wake of the pandemic.
Mobile payments and USSD continued to experience steady growth, growing by 84 and 80 per cent respectively. NIBSS noted that with 49.5 per cent smartphone ownership and an estimated 97 million mobile internet users, there are strong indicators that mobile and USSD payments will see significant growth in the short-medium term.
The COVID-19 pandemic has forever changed the e-Payments landscape. It accelerated the adoption of instant payments as the population transitioned to electronic channels for funds exchange in the wake of Government imposed lockdowns.
By gender, most transfers had been initiated by men who also accounted for the largest recipients. Male customers had accounted for 72 per cent of payers and 67 per cent of receivers while female customers accounted for 33 per cent of receivers and 28 per cent of payers.
On age distribution, the younger demographic continues to boost the adoption of instant payments. Customers between 25-34 years carried out 36 per cent of all interbank instant payments in 2020. We also observed a 97 per cent increase in adoption among customers aged between 15-24 years, with 12 per cent of transactions initiated by this cluster.
On a larger scale, 79 per cent of instant payment transactions in 2020 were initiated by customers between 15-44 years. This demographic are those more likely to adopt electronic payments, and is also representative of the Nigerian population distribution, which is heavily skewed toward the younger age brackets.