Failed transactions drop e-payments 4.83% MoM
By Jeph Ajobaju, Chief Copy Editor
A rise in failed transactions slashed e-payments to N37.67 trillion in February, a 4.83 per cent decline month-on-month (MoM) from N39.58 trillion in January, according to latest data from the Nigeria Inter-Bank Settlement System (NIBSS).
In contrast, e-payment gateways increased 41.29 per cent, as cashless transactions were used 901.46 million times in February, against 638 million times in January.
But the total value of cashless transactions dropped in February because of increase in failed transactions.
Since 2020, the NIBSS has not updated its efficiency platform portal which states the number of failed transitions and more.
The NIBSS records cashless transactions from the Nigeria Instant Payment System and Point of Sales (PoS) terminals.
In February, the total NIP (instant payments) fell to N36.79 trillion from N38.772 trillion in January.
Despite naira scarcity, NIBSS data shows the value of PoS transactions grew from N807.16 billion in January to N883.45 billion in February, per reporting by The PUNCH.
Mobile transfers, the primary payment gateway for many Nigerians, soared 69.87 per cent from 108.14 million times in January to 183.69 million times in February.
However, transaction value grew only 7.88 per cent from N2.37 trillion in January to N2.56 trillion in February, underscoring multiple failed mobile transactions experienced by many.
More Nigerians have adopted electronic financial transactions since the Central Bank of Nigeria (CBN) announced its naira redesign policy and withdrawal limits in the last quarter of 2022.
“The maximum weekly limit for cash withdrawals across all channels by individuals and corporate organisations shall be N500,000 and N5m respectively,” the CBN directed at the time.
“Customers should be encouraged to use alternative channels (Internet banking, mobile banking apps, USSD, cards/POS, eNaira, etc.) to conduct their banking transactions.”
Pressure of increased e-payments has, however, overwhelmed banks, leaving many customers stranded.
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NIBSS capacity inadequate
Nigerians have been on Twitter, tagging banks, complaining about failed transactions.
“I made a payment to someone one morning and they did not receive the alert immediately,” Nigerian Association of Small-Scale Industrialists Vice President Seun Kuti-George told The PUNCH.
“I had to leave the goods there until the next morning hoping that the fellow would get alert by then. If it was an emergency or a matter of life and death or a matter of contract that will be cancelled, I would have lost that.”
Bank officials complain some of these transaction failures arose because the NIBSS has not increased its capacity to cope with increase in the volume of transactions.
An official of First Bank, who did not want his name disclosed, disclosed the NIBSS has been witnessing more downtime because of the pressure of transactions.
According to the banker, downtime affects the outflow and inflow of transfers, and payment switch capacity has to increase to be able to handle the pressure.
A source in the payment industry told The PUNCH the increase in mobile transfers stem from pressure and a lack of robust infrastructure.
“I don’t think we are ready for this. I think the infrastructure is not robust enough to carry out the volume of transactions we intend to do,” he stressed.
“With that said, what I believe is over time, the infrastructure will catch up. This will probably happen because the CBN will put pressure on the banks and financial institutions to invest more.”
Other experts argue a lot of failed transactions are a result of poor network infrastructure.
“You know the banks do not provide network services. Based on what we found out, there was a failure in the network system,” Bank Customers Association of Nigeria President Uju Ogunbunka said.
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