Monthly Cheque Transactions Decline to N489bn

CBNNigerian central bank Governor Godwin Emefiele. Photographer: STRINGER/AFP via Getty Images

A steady decline in the traditional cheque transaction may push the growth of mobile money in the country, a new report has shown.

There have been general declines in monthly cheque transactions in the country since 2016, sliding from N501.166bn in the month of February to N488.627bn in June.

A report from the Nigerian Interbank Settlement System on Sunday showed that cheque transactions worth of N464.553bn were carried out in January; N501.166bn in February; and N487.572bn in March, ending the first quarter.

In the second quarter of the year, spanning April, May and June, cheque transactions worth N472.465bn, N480.409bn and N488.627bn, were respectively executed.

In terms of volume of transactions, the NIBSS’ report indicated that while the total number of deals stood at 6,407,507 in 2015, only 5,731,805 units of transactions were recorded in 2016.

Going by the details of the data, what this means is a decline in the volume of transaction by 675,702 this year, when compared with what was transacted last year.

However, the report stated that Nigerians were moving away from traditional cheque transaction to a more convenient electronic means of carrying out financial exchanges, “as the value of half-year cheque transactions in 2016 dropped by more than 10 per cent.”

According to the NIBSS, the decline compares with the value of transaction during the same period last year, where more cheque transaction took place.

It stated in its report that from a total of N3.194tn cheque issuance value in the first half of last year, the figure crashed to N2.894tn during the same period this year.

From the report, the N300bn transaction difference represents about 10.36 per cent decline in cheque transactions this year.

A further analysis of the report showed that in January, February and March last year, the cheque issuance value stood at N541.062bn, N548.116bn and N565.138bn, respectively.

In April, the transaction value was N510.442bn; N487.937bn in May; and in June 2015, the figure stood at N542.08bn.

Meanwhile, the NIBSS stated that the steady move by Nigerians from traditional cheque transactions to electronic transactions might have positively impacted on the growth of mobile money.

In its fact sheet, it stated that the total number of customers on mobile money operations had risen to 29.13 million.

The report showed that the total number of agents enrolled at the end of the first quarter of 2016 (March) was 106,636; transaction volume within the quarter was at 14.09 million, while transactions value averaged N0.14tn.

From the document, the Central Bank of Nigeria has so far licensed 21 mobile money operators, with all of them already integrated to the NIBSS platform for interoperability.

It also indicated that Nigerian banks had issued over 24 million Bank Verification Numbers to their customers as of March ending, this year.

The report stated that while over 30.1 million account holders had enrolled for the BVN, only 24 million had received their verification numbers.

The number of enrolled bank customers thus represents about 34.7 per cent of the total 86.5 million bank accounts opened by government, corporate and individuals with various banks in the country.

“The purpose of the project is to use biometric information as a means of first identifying and verifying all individuals that have account(s) in any Nigerian bank and consequently, as a means of authenticating customer’s identity at point of transactions,” the Executive Director, Technology and Operations, NIBSS, Mr. Niyi Ajao, said.

“The BVN exercise will also provide a uniform industrially accepted unique identity for bank customers, to authenticate transactions without the use of cards, using only biometric features and Personal Identity Number identification of blacklisted customers,” Ajao added.

According to the NIBSS, starting from January 2015, 2.2 million accounts were enrolled; 2.7 million in February; 3.3 million in March; and by April, May and June, the figures increased to 7.7 million; 9.2 million and 12.4 million, respectively.

In July, August and September, the figure rose to 12.7 million; 13.7 million and 14. 5 million accounts, respectively.

The report added that in the last quarter of the year, 16.3 million accounts were enrolled in October; 21.2 million in November; and in December, the figure stood at 28.2 million.

In the first quarter of this year, the number of enrolled bank accounts for the BVN further increased to well over 32.1 million.

The data also revealed that the number of bank accounts opened with different banks in the country so far had reached 86.5 million.

The number of accounts opened so far in the country had increased from 75 million in January last year to 85 million by the end of December last year, it stated.

It also said the number of bank accounts residing with various banks in January this year rose to 86.5 million.

A further analysis of the bank accounts data, however, showed that the total active accounts in the country dropped from 59 million last December to 58.5 million at the end of January this year.

This means only 67 per cent of the total bank accounts opened in the country are active while 33 per cent are redundant.

Also, as of January this year, 59.7 million bank accounts were savings accounts; 23.4 million were current accounts; while other forms of accounts such as domiciliary, fixed deposit totalled 3.3 million.

Despite the number of inactive accounts, most account holders significantly used various electronic payment platforms for transaction in 2015.

According to the NIBSS Electronic Fact Sheet for the Year 2015, over N35.5tn transactions were carried out on various electronic payment platforms.

The transactions were carried out through the Nationwide Cheque Truncations Services platform, the NIBSS Instant Pay, the Electronic Bills Payment, Point of Sales, Automated Teller Machines and mobile money operators.

The NIBSS report showed that the number of the ATM cards so far issued by commercial banks in Nigeria had hit 41.89 million.

These include the Chip and PIN ATM card brands from indigenous Verve, MasterCard and Visa.

Following the report, “the country recorded a total number of the ATMs as of March 2016 stood at 16,660; the total number of active cards, 41.89 million; while the volume and value of the ATM transactions between January and March, 2016 stood at N0.12bn and N1.07tn, respectively.”

About the Author

Samed Olukoya
Samed Olukoya is the CEO/Founder of investorsking.com, a digital business media, with over 10 years' experience as a foreign exchange research analyst and trader. A graduate of University of East London, U.K. and a vivid financial markets analyst.

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