Nigerians exchanged N572tr in seven months as ePayment platforms struggle

. NIBSS puts dormant bank accounts at 18.9m as BVN hits 62.7m

Data from the Nigeria Interbank Settlement System (NIBSS) showed that cashless transactions in Nigeria rose by 84.37 per cent to N572.63 trillion in the first seven months of 2024.

This growth showed the growing reliance on digital payments in a country. As of the end of 2023, cashless payments grew to N611.06 trillion from N395.38 trillion in 2022, and experts have said the numbers will hit unprecedented levels in 2024.

The NIBSS records cashless transactions across instant payments and Points of Sale (PoS). Instant payments recorded an 86.44 per cent increase to N566.39 trillion. PoS channels recorded an 8.19 per cent decline to N6.23 trillion.

While services have not been fantastic on some of these payment platforms, including NIP, Internet banking, and mobile banking apps among others, PoS operators have faced regulatory concerns from the Corporate Affairs Commission (CAC), which insisted that all operators must register.

Recall that in May, the CAC gave PoS agents a deadline of July 7, 2024, to register their business. The Registrar-General of the CAC, Hussaini Magaji, who announced this, said the registration was also in line with the legal requirements and the directives of the Central Bank of Nigeria (CBN).

The Commission, however, later extended the deadline by 60 days to September 5, 2024. The extension came with a warning that any operator that failed to meet the new deadline would face prosecution and risk losing the business.

But the Association of Mobile Money & Bank Agents Bank in Nigeria (AMMBAN), which houses PoS players, has taken the matter to court for judicial interpretation. With the matter expected to come up in October, AMMBAN is insisting that the registration requirements imposed by CAC violated the provision of the Companies and Allied Matters Act, Laws of the Federation of Nigeria, 2004, which “explicitly states that the commission has no jurisdiction over individuals not operating as a company.

In one of NIBSS reports, POS terminals accounted for 26.37 per cent of fraud incidents in 2023. Compounding the woes of ePayment transactions in the country has been the inability of Automated Teller Machines (ATMs) to dispense cash. Most banks’ ATMs are usually without cash.

Already, the Central Bank of Nigeria (CBN) has announced that it will sanction banks failing to dispense cash through their automated teller machine (ATMs), as part of efforts to ensure sufficient cash in circulation.

CBN Governor, Yemi Cardoso, at the end of the 297th Monetary Policy Committee (MPC) meeting in Abuja on Tuesday, reiterated that the CBN’s monitoring and spot-checking system would keep track of banks’ compliance, and those failing to meet the requirement would be sanctioned.
The governor emphasized that all deposit money banks must ensure there is always enough cash available for withdrawals.

Further analysis of NIBSS data showed that the number of active bank accounts in Nigeria rose to 231.1 million in July 2024. Previous NIBSS data showed that active bank accounts in the country stood at 202.6 million at the end of 2023.

This means that a total of 28.5 million accounts have been activated between January and July this year. According to NIBSS, the number of inactive or dormant bank accounts in the country stood at 18.9 million. This showed a slight increase in the number of abandoned accounts in the seven months as the figure stood at 18.06 million at the end of 2023.

An inactive or dormant account is a bank account that has had no activity on it for 12 months. Banks convert accounts with no activity for a long period into inoperative or dormant accounts to curtail the risk of fraud.
By segregating the accounts, banks bring to their workers’ attention the risk involved in these accounts and call for their due diligence.

Similarly, the NIBSS data showed that the number of bank accounts that have been closed stood at 23.3 million. It means that about 1.9 million accounts have been closed this year as the number of closed bank accounts was 21.2 million as of December 2023.

According to NIBSS, there is still a huge gap between the number of bank accounts in the country and the number of Bank Verification Numbers (BVN), which is now a compulsory requirement for opening an account. The NIBSS database showed that the total registered BVNs by account owners stood at 62.7 million as of the same July 2024.