Nigeria has seen a massive surge in mobile banking usage in the past year, with mobile gateways being used 108.14 million times in January 2023, a 230.72% increase from the previous year.
The value of mobile transactions also jumped by 124.85% to N2.37tn from N1.05tn in January 2022. This remarkable growth can be attributed to the Central Bank of Nigeria’s (CBN) redesign of the naira and new withdrawal limit policy, which has encouraged bank customers to embrace mobile banking for their transactions.
However, despite this growth, the country’s banking apps have faced multiple reported failures recently, leaving people stranded and confused.
The chairman of Voriancorelli and Cofounder of Cellulant, Bolaji Akinboro, explained that while Nigeria has one of the most sophisticated payment infrastructures in the world, its mobile network backbone leaves much to be desired.
The country’s broadband access was only 47.36% as of December 2022, which has led to the failure of many mobile apps and hindered their ability to provide seamless services.
According to a source in the payment industry, the CBN needs to put pressure on banks and financial institutions to invest more in payment gateways and improve their infrastructure.
Over time, the infrastructure will likely catch up as new players enter the fintech space and telecoms and increase their investments. The success rate of transactions currently stands at around 80%.
The CBN aims to drive a cashless economy by 2025, with a “mobile first generation” driving this change. While the use of mobile devices for financial transactions has grown, smartphone access continues to lag in many developing countries, including Nigeria, where only 44% of the population had access to smartphones in 2022.
Despite the current infrastructural challenges, the growth of mobile banking in Nigeria is undeniable and poised to continue. The CBN’s push towards a cashless economy and increasing investment in the fintech and telecoms space will play a crucial role in improving the country’s payment infrastructure and driving further growth in mobile banking.