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.
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.”
COVID-19: Demand for Second Passport by High Net Worth Individuals Surges 50 Percent
The number of high net worth individuals looking for a second international passport in order to improve their global access rose by 50 percent year-on-year, according to the latest statement from the deVere Group.
The group said national lockdowns, borders and travel restrictions have helped boost enquiries for second passports, citizenships and overseas residencies this year.
deVere Group, an independent financial advisory firm, that manages over 100,000 clients globally said demand for its residency and citizen service skyrocketed in this highly unusual year.
Most of the enquiries were from high net worth individuals from the U.S., India, South Africa, Russia, the Middle East and East Asia “who are seeking alternative options in Europe and the Commonwealth.”
According to Nigel Green, the Founder and CEO of deVere Group, “Previously, a second passport, citizenship or residency were regarded by many as the ultimate luxury item; a status symbol like yachts, supercars and original artwork.
“While this still remains the case, there’s also been a shift due to the pandemic.
“Now, second citizenship or overseas residency are increasingly becoming not just a ‘nice to have accessory’ but a ‘must have.’
“Whether it be for personal reasons, such as to remain with loved ones overseas or be able to visit them, or for business reasons, a growing number of people are seeking ways to secure their freedom of movement as they have faced travel restrictions which are, typically, based on citizenship.”
He continues: “The pandemic has served as a major catalyst for demand which skyrocketed this year. It has focused minds to secure that second passport or elite residency.
“However, the appeal for is broader than just the global Covid-19 crisis.
“Increasingly people prefer the concept of being a global citizen, rather than being solely tied to the country of their birth.
“They too value the many associated benefits including visa-free travel, world-class education, optimal healthcare, political and economic stability, reduced tax liabilities and wider business and career opportunities.”
However, nations have different criteria for granting citizenship, including time spent in the country, the ability to prove the legal source of funds and zero criminal records.
For instance, Portugal’s residency program requires just two weeks every two years of residency to gain the benefits, including the right to live, work, study and open a business there, as well as travel across the 26 countries of Europe’s Schengen area.
“More and more nations are running citizenship-by-investment programs, in which applicants invest an amount of money in a sponsoring country typically in high-end, new-build real estate developments in exchange for permanent residency, citizenship, or both,” affirms James Minns, deVere’s Head of Residency & Citizenship.
“These programmes, which high-net-worth individuals regard as invaluable insurance, are typically based on property investments that start from 250,000 EUR.”
Nigel Green concludes: “These highly unusual times have fuelled the surge in demand for second passports.
“The pandemic has brought into sharp focus what really matters to people: family, freedom and security.”
Online Shopping Skyrockets Amidst COVID-19 Pandemic
Lagos, Tuesday 30 November 2020 – As we experience the first-ever Black Friday promotional phenomenon under lockdown, the dominance of online shopping platforms has become crystal clear.
To keep track of this development Nielsen Global Connect has conducted extensive research that includes an overarching view of the massive increase in online FMCG shopping and just how rapidly it evolved over the first six months of lockdown.
Nielsen Connect, Global Intelligence Unit, Executive Director Ailsa Wingfield comments; “Amidst the COVID-19 pandemic, online FMCG shopping usage has advanced by up to five years in just six short months. As a result, there has been a rapid increase in online shopping and usage with new users, frequency and preference having skyrocketed.
Preference of online as the most-used channel has also more than doubled.
Evidence of this results from the Nielsen New Shopper Normal Study which was conducted in May 2020 allowing for powerful insight into the effect of the COVID-19 lockdown on consumers, during an unprecedented time in our history.
The Nielsen study found that in terms of new Nigerian FMCG online shoppers, 29% had never shopped online. Sixty-seven per cent recently shopped online during the past week and 12% shopped most often online during the past week versus only 7% pre COVID-19. In terms of Frequency, 23% said they shopped online multiple times a week and 44% shopped once a week.
The best of both worlds
Nielsen’s consumer and retail measurement evidence therefore clearly shows a massive and ongoing move to online, but it must be pointed out that this is not in isolation when considering the overall shopping journey. In Nigeria, two-thirds of consumers (67%) say they are now using both online and offline channels with fewer exclusive brick & mortar shoppers at 33%.
Wingfield elaborates; “Overall, consumers are shopping and buying in a mixed reality. In many instances, online shopping options are a new addition to their existing store repertoire but most consumers indicate that they will maintain a combination of online and offline – which will lead to the rise of more omnichannel shopping journeys and experiences.”
Interestingly, this adoption is even more pronounced for ‘Constrained Consumers’ – those who have been impacted by job/income loss. These consumers are less likely to be exclusive Brick & Mortar shoppers as Omni shopping is even more important to help them make better and more frugal choices.
Wingfield adds; “The challenge for retailers is that consumers want equivalent experiences regardless of the environment in which they shop. These are categorised by a seamless experience where the retailer’s online, and bricks and mortar offerings, are connected and offer a similar and familiar shopping experience.”
Still more work to be done
In terms of the remaining obstacles for retailers to overcome and where online needs to work harder, the biggest concern for Nigerian shoppers is delivery which has emerged as the most important factor to get right. 42% of Nigerian consumers stated they wanted same/next-day delivery while 21% said they don’t want to wait when there are no slots available.
When it comes to Price & Promo perceptions, 57% of respondents said online prices had increased, while 22% perceived less online promotion and 17% said online was more expensive. That said, online price perceptions are currently more favourable than offline (brick and mortar) perceptions. They may also improve even further, following the heavy push by retailers of online-only Black Friday and year end seasonal promotions.
Looking to the future
Looking at how consumers’ newfound relationship with online shopping will evolve, Wingfield comments; “We saw that ‘necessity catalysts’ such as safety and precaution considerations and the availability of products initially drew consumers online, but there are still several obstacles to overcome. To sustain online FMCG traction, retailers and brands will need to focus on how they can solve consumers’ changing needs by differentiating their offerings in the Omni shopping journey.”
She goes on to suggest; “They will need to solve for overall satisfaction and experiences in the areas of time, convenience, availability and value based on consumers’ altered circumstances to truly differentiate themselves.”
Rising Operating Costs, Exchange Rates, Service Charge Increased Airfares by 100%
Price of air tickets rose by 100 percent across several routes as rising operating costs, high foreign exchange and surged in service charge forced airline operators to raise airfares.
Airlines attributed the increase to a series of price adjustments and the introduction of new fees by the Federal Airport Authority of Nigeria (FAAN). According to them, airline firms were given special concessions, which will continue to push price up and could hit an average of N100,000 for even the Lagos/Abuja route.
Speaking on the situation, Captain Ado Sanusi, the Managing Director of Aero Contractors, said airline companies could not access forex at the official rate while the FAAN had upped its fees.
He said “We were buying dollars at N360 and it went to N380 but you can’t get it for less than N480.
“We are paying VAT at 7.5 per cent. We are paying 15 per cent duty on our spare parts. The boarding passes, we pay 15 per cent duty on it.
“The passenger service charge has increased by FAAN. So, don’t look at one component but look at the total reason for the increase.
“Yes, there is an increase in demand but it is caused by the lack of aircraft and this lack of aircraft is caused by unavailability of spare parts which is also caused by dollar scarcity.”
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