Failed Transactions Drag on E-Payment Performance as Transaction Value Drops to N37.7tn

According to recent data from the Nigeria Interbank Settlement System (NIBSS), the value of E-payment transactions in Nigeria fell to N37.67 trillion in February 2023, a decline of 4.83 percent from N39.58 trillion recorded in the month of January.

The NBSS data also revealed that payments platforms, which include E-Bills Pay, NIBSS Interbank Platform, and Point of Sales (PoS), among others were used 901.46 million times last month, as against the 638 million times reported in January.

PoS transaction volume is reported to have risen from 96.3 million in January to 113.5 million in February. Cheque transactions also increased to 333.952 in February from 319.373 in January with values put at N238.4 billion in February as against N244 billion in January.

For the past two months, a large percentage of Nigerians have been faced with unpleasant situations such as lack of cash at ATMs, exorbitant charges from PoS agents, a rise in the failure of mobile transactions, as well as failure of the Unstructured Supplementary Service Data (USSD) which has severely affected businesses in the country most especially small-scale businesses.

With the Central Bank of Nigeria’s (CBN) Naira redesign policy bottleneck and cash withdrawal limits imposed on transactions to spur the adoption of electronic payments compelling millions of Nigerians to jump on the poorly designed electronic channels, slower servers, failed transactions and other technical limitations have crippled electronic payments and impede business activities.

Contrary to the CBN claims that this policy will deepen electronic means of transactions, it has been faced with a decline in the percentage of mobile transactions as a large percentage of the citizens continue to lament cases of failed transactions and the refusal of banks to reverse their funds. This had seen several individuals reluctant to use mobile banking means of payment resulting in a decline in e-payment transactions.

Investors King understands that other factors could be responsible for the decline in e-payments transaction value.

One, more low transaction value compared to January when people were reluctant to use e-payment.

Two, there seems to be an improvement in the circulation of the new naira notes last month than in January, which might have seen a lot of individuals resort to cash transactions. Lastly, a general drop in consumer spending due to the cashless economy caused by naira scarcity.

A lot of Nigerians have however expressed concerns, faulting the Central Bank of Nigeria (CBN) Naira redesign policy, noting that it has been plagued with several challenges.

The pressure of increased electronic payment has overwhelmed the banking sector, leaving many customers stranded. Many bankers have suggested that some of these failures have been because the NIBSS didn’t increase its capacity to accommodate the increase in transaction volume.

They also disclosed that the huge number of failed transactions when using mobile bank apps to send or receive money, just shows that the country is not yet ready for the cashless policy. Some experts have also stated that a lot of failed transactions are a result of poor network infrastructure.

Citizens continue to decry that the whole banking system is a mess, as they continue to witness failed transactions and unreversed debits, coupled with busy customer care lines, which have continued to heighten frustration in the country.