More Nigerians embracing e-banking as cheque usage declines ~NIBSS, NBS data
By Oludare Mayowa
Signs that Nigerians are gradually embracing the e-payments system in financial transactions came to light as the data on cheque clearing through the Nigeria Interbank Settlement System (NIBSS) continue to decline in favour of the e-banking system.
According to statistics from NIBSS, cheque clearing for the month of August 2020 stood at 392.965 representing 34.23 percent decrease compared with 587.515 volume of check cleared in the corresponding period of last year.
When compared with the figure of cheque cleared in August 2018, the data further showed a further downward slope in the number of cheques presented for clearing through the interbank system.
A total of 685.571 cheques were cleared through the interbank settlement system in August 2018, representing a decline of 42.68 percent compared with the total cleared in the same period of August 2020.
A month-on-month transaction also showed that the use of cheques in financial transactions is declining among Nigerians, according to data by the NIBSS.
Data published by the National Bureau of Statistics (NBS) on Wednesday showed that a total volume of 2,160,436,659 transactions valued at N263.78 trillion were recorded in the second quarter of 2020 as data on Electronic Payment Channels in the Nigeria Banking Sector revealed.
The outbreak of the Coronavirus in March 2020, pushed demand for e-banking among Nigerians as the lockdown imposed by the government as part of measures to contain the spread of the virus further escalated the habit of online transactions.
Many Nigerians embraced the e-banking system during the period of lockdown because of its convince and speed of transactions.
Also, many merchants increased the deployment of e-payment in their transactions because of the security concern and the challenges of cash processing during the lockdown period.
Unlike e-payment, the total volume of cheques transacted in the first three months of the year stood at 6,445,511 with at total value of N4.84 trillion, according to the NBS latest data.
The figure for the second quarter showed a sharp decline as the volume of cheques fell to 2,638,156 with a value of N2.28 trillion in the period of April to June 2020.
Although NEFT transfer volume and value declined in the second quarter compared with the first three months of the year, the overall performance of e-channel transactions still triumphed over physical transactions.
In the first three months of the year, a total volume of 56,777,363 worth N67.48 trillion passed through NEFT transfer, while in the second quarter, a total of 40,939,113 valued at N59.55 trillion passed through NEFT.
Sources within the banking sector told one of our correspondents that the upsurge in the usage of e-payment channels was aided by the closure of many banking halls in the period of the lockdown, which reduced access to physical banking transactions.
The Central bank of Nigeria (CBN) had about six years ago imposed limits on cash transactions through the banking system in a bid to boost e-banking transactions across the country and discourage the use of cash in the economy.
Experts said the increasing financial transactions through e-channels was also an indication that e-commerce is taking a prominent position in the nation’s economy.
However, despite the increase in e-payment transactions, sources within the banking sector told Global Financial Digest that cash remains kings among many Nigerians.
Many Nigerians are still carrying around huge cash for transactions in spite of the security risk involved in such transactions, a banker told our correspondent.
Experts are, however, predicted a decline in volume and value of financial transactions going forward as the possibility of Nigeria slipping into recession in the second quarter is becoming glaring.
Nigeria’s economy contracted at 6.10 percent in the second quarter of the year from 1.87 percent growth in the first quarter of the year.