POS transactions drop despite 7.6% rise in terminal numbers
By Jeph Ajobaju, Chief Copy Editor
Transactions through Point of Sale (POS) payments dropped 0.74 per cent to N552.26 billion in October against N556.36 billion in September, according to latest data by the Nigeria Inter-Bank Settlement System (NIBSS).
But the value of NIBSS instant payment (NIP) transactions rose 3.36 per cent to N24.31 trillion in October above N23.52 trillion in September.
POS transactions value reduced despite a 33.6 per cent rise in transactions volume to 91.39 million from 87.71 million in September.
However, the number of POS terminals deployed in October rose 7.6 per cent month-on-month (MoM) to 764,589.
Even though POS transactions dipped 0.74 per cent MoM to N552.3 billion in October 2021 it jumped 19.81 per cent year on year (YoY) compared with N460.95 billion in October 2020, per reporting by Nairametrics.
A total N5.17 trillion POS transactions were recorded between January and October 2021, which is 40.9 per cent higher than N3.67 billion in the same period in 2020.
Deployed terminals increased to 764,589 (7.6 per cent MoM, 82 per cent YoY).
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POS transactions clinch N4.1tr in 8 months
POS transactions volume continues to rise nationwide as adoption of cashless dealings have grown since the pandemic lockdown in 2020 when Nigerians had to make financial transactions from home as they could not go to the bank.
NIBSS data shows that POS transactions value between January and August 2021 had surged to N4.06 trillion, a 45 per cent rise against N2.81 trillion by August 2020.
The 45 per cent rise in value by August was its highest levels for any eight-month period, compared with N2.81 trillion (44.8 per cent) in 2020 and N1.96 trillion (108 per cent) in 2019.
POS transactions volume by August 2021 reached 619.3 million, notching up 61.8 per cent against 382.9 million by August 2020.
A total 686,577 POS terminals were deployed nationwide as of August 2021, an 84.4 per cent increase above 372,333 by August 2020.
Further breakdown
POS transactions value in August 2021 alone amounted to N504.88 billion, less than N554.67 billion in July but more than N503.91 billion in June, according to NIBSS data reported by Nairametrics,
A total N4.06 trillion worth of POS transactions was done across the country by August 2021, compared with
- N1.41 trillion (2017)
- N2.32 trillion (2018)
- N3.2 trillion (2019)
- N4.73 trillion (2020)
A total 619.28 million POS transactions volume was recorded by August 2021, against
- 146.27 million (2017)
- 285.89 million (2018)
- 438.61 million (2019)
- 655.75 million (2020)
Terminals deployed by August 2021 increased 4 per cent to 686,577 from 660,402 in July and 49.5 per cent YoY.
POS transactions value declined 9 per cent to N504.88 billion in August 2021 from N554.67 billion in July.
POS transactions volume dropped 7.4 per cent to 75.55 million in August from 81.62 million in July.
Growing preference for cashless payments
Nairametrics reports that insecurity, Covid-19, and waiting time at the bank partly explain the increase in POS transactions, noting that using an ATM card is safer.
The youth tap into the opportunity by providing POS services in various localities to facilitate financial transactions for the increasing number of people working from home.
POS terminals and kiosks are popping up across Nigeria and have become a major business in the South West.
Investigation by Nairametrics shows that the business is highly profitable as some agents make between N20,000 and N100,000 daily, a great incentive for young people to go into it.
Students set up shops in their institutions to bring banking transactions closer to fellow students.
Aisha, a student at the University of Ibadan, said considering the stress of walking down to the ATM point and having to wait in line, she prefers to pay N100 to a nearby POS vendor to withdraw cash and have more time for other activities.
Olaitan, a virtual analyst, said: “The cost of going to the bank to use the ATM is about N300 coupled with the risk of facing long queues, why not just pay an additional N100 to N150 to get my withdrawal or deposits done as fast as possible?”
But when withdrawals are significantly large, it becomes imperative to visit the bank as most POS kiosks are in open places and could attract criminals. Multiplication of transaction fee also outweighs the cost of transport and queuing at the bank.
Delivery companies are insisting on POS payment rather than cash payment. Some other businesses have stopped collecting cash, opting instead for bank transfers or POS payments
