Nigeria Inter-Bank Settlement Systems (NIBSS) which holds the payment data in the financial industry has revealed that only 12 per cent of bank customers make use of the Point of Sale Terminals (POS) despite the almost 400 percent rise of the terminals.
This means that of the 30 million unique bank customers holding over 80 million bank accounts and 60 million payment cards only about 3.5 million of them use their cards on PoS machines. In August this year, the volume of transaction done via PoS terminals rose to 13.27 million from 5.37 million in the comparable period of last year and 3.73 million in 2015.
Value of transactions done via the 141,531 PoS machines that have been deployed as at August this year likewise rose to N124.44 billion from N64.106 billion last year August and N35.83 billion in 2015.
According to the managing director and chief executive of the Nigeria Inter Bank Settlement Systems (NIBSS) which holds the payment data in the financial industry, Ade Shonubi, the numbers are distressing.
While noting that the increase in volume and value of transactions in the alternative payment channel is a feat that ought to be applauded, he said the figures when looked at “is not good. Our analysis shows that only 3.5 million people use PoS out of the 30 million bank customers and over 60 million cards that have been issued.
“We are not asking the right question which is why are people not using the channels that are there and these are educated people.” He noted that there are too many assumptions around what the issues are and therefore “we put a lot of efforts into things that at the end of the day do not generate the results that we expect.”
Shonubi stressed the need to start focusing on understanding what the issues are adding that “there are a lot of government and Central Bank of Nigeria (CBN) initiatives but they are not cohesive to begin to build infrastructure” that is needed.
The Co-Founder of Lidya, Ercin Eksin who had also worked on the start-up of Jumia, an e-commerce platform noted that infrastructure remains a major challenge in achieving a widespread usage of payment channels in the country.
He noted that in situations where merchants have up to four or five PoS terminals and only one or two is working, customers are bound to mostly use cash in payment. This he said is also impacting financial inclusion in the country as the payment access points are not enough to drive it particularly in the suburbs and rural areas.
To the chairman of the Board of Enhancing Financial Innovation and Access (EFInA) Modupe Ladipo, the need to address the lack of access points is as important as cutting down the costs of these access points to the customers particularly in the rural areas.
The three of them agreed that access points still remain a challenge as the country still has only 17,712 Automated Teller Machines around the country serving the 30.457 million bank customers that have BVN. This means that close to 200 customers are being serviced by an ATM and this number goes higher at the suburbs and rural areas where fewer ATMs are deployed.