According to data from the Nigeria Inter-Bank Settlement System (NIBSS), Point-of-sale (POS) transactions between January and July this year increased 29.3 percent to ₦4.6 trillion. In the same period of 2021, this figure stood at ₦3.56 trillion and compared to the figures recorded in 2020, it is a 90.3 percent increase. Data from the NIBSS also shows that POS transaction volume this year soared 25 percent year-over-year to 679.8 million between January and July from 543.7 million recorded in the same period last year.
The data indicate an increase in the volume of POS transactions completed in Nigeria between January and July, as well as an increase in their value. It also indicates that more Nigerians are shifting away from the cash method of completing transactions to electronic options thanks to massive growth in the country’s commercial sector; from which online shopping is the largest category.
NIBSS data also showed a drop in the volume and value of transactions completed by cheques in the same period. Between January and July, the 2.4 million cheque transactions recorded were worth only ₦1.83 trillion, a decline when juxtaposed with figures from last year.
So far, July was the month that saw the most POS transaction volume. POS transactions completed in the month of July were worth ₦724.7 billion. Analysis showed that compared to 2018 when the NIBSS started tracking POS transaction data, currently POS transactions have almost tripled. In the first seven months of 2018, the NIBSS reported ₦1.2 trillion worth of POS transactions. This rose to ₦1.66 trillion in 2019 before significantly soaring in 2020 as a result of its relevance during the pandemic.
Various factors have contributed to the rise and relevance of POS transactions in Nigeria (and Africa). They include the difficulty in accessing cash, sending and receiving money via banks as a result of covid restrictions, long queues, epileptic availability of cash at ATM machines, etc. Other significant factors include high levels of accessibility, insecurity, and proximity.
Basically, POS services have helped to bring financial services to more Nigerians irrespective of whether they live in rural or urban areas. For some, POS services have provided either additional revenue or income stream or self-employment.
It is also pertinent to know that between January and July this year, transactions worth ₦204.5 trillion have been performed using electronic channels.