HabariPay, the fintech subsidiary of Guaranty Trust Holding Company (GTCO), has reported a 30.7 percent rise in profit in the first half of 2024.

Analysis of the tier-one bank’s recent financial statement showed that the fintech recorded a profit after tax of N1.7 billion in H1, compared to N1.3 billion in the same period of 2023.

According to the financial statement, HabariPay’s growth showed promising adoption of the bank’s digital payments business as it looks to bolster its hold on the fintech sector.

“Through our Habari platform, our customers can shop for diverse products online, pay bills, watch videos, and listen to music. We continue to improve the platform to meet and support everyone’s lifestyle,” it said.

A further breakdown of the report revealed that the fintech company’s operating income in the first six months increased by 22.7 percent, N2.7 billion in H1, from N2.2 billion in the same period of last year. Its operating expenses rose to N703 million from N688 million.

The company generated N2.06 billion from its core business activities, an 815.6 percent rise from N225 million reported in 2023.

When Guaranty Trust Bank transitioned from its standalone commercial banking structure into a holding company, HabariPay became a standalone business offering payments, a marketplace, and small business services.

HabariPay’s flagship product, Squad, combines a payment gateway and e-commerce platform with a Point-of-Sale business.

The statement added, “In line with its mission of empowering businesses and young innovators across Africa, HabariPay’s Squad launched its first-ever coding sprint, Take on Squad Hackathon 1.0. The two-day social coding event was held at the state-of-the-art GTCO Training Complex, Tayo’s Plaza, Abeokuta, Ogun State.”

Opay will begin charging customers a N50 levy on electronic transfers of N10,000 and above paid into their accounts from September 9, 2024.

The fintech revealed this in a message to customers titled ‘FGN Electronic Money Transfer levy’, which started making rounds on Saturday.

The company said, “Please be informed that starting September 9th 2024, a one-time fee of N50 will be applied to electronic transfers of N10,000 and above paid into your personal or business account, in compliance with the Federal Inland Revenue Service (FIRS) regulations.

The fintech noted that it would not benefit from this charge as it is directly paid to the Federal Government. The fintech already charges customers N10 after their third transfer to other banks in a day.

EMTL, introduced in the Finance Act 2020, was an amendment to the Stamp Duty Act to tap into the growth of electronic transfers. It is a one-off charge of N50 on electronic receipt or transfer of money deposited in any deposit bank or financial institution on any type of account for sums of N10,000 and above.

In 2023, the Federal government made N180.31 billion from EMTL, a 29.45 percent increase from its N136.35 billion target. Revenue from EMTL is shared among the three tiers of government. The growth in EMTL revenue is expected to be fuelled by further increases in cashless transactions in the country, especially with the Central Bank of Nigeria anticipating a slowdown in cash usage by 2025.

By the end of 2023, cashless transactions surged to over N600 trillion from N395.38 trillion in 2022 as more Nigerians embraced digital payment channels. This trend continued in 2024, with transactions growing by 88.09 percent to N237 trillion in the first quarter (Q1) of 2024.

However, revenues from EMTL have not reflected this growth. According to experts’ micro transactions, defined as transfers below N10,000, and their platforms, such as Opay and Palmpay, are powering Nigeria’s electronic payment (e-payment) boom.

Opay, which has over 30 million customers, was one of the winners of the 2023 Central Bank of Nigeria’s botched naira redesign and cashless policy when it demonstrated resilience during the naira cash shortage that exposed vulnerabilities in many traditional banking platforms.

“Payment methods have become easier, faster, and better, and people are using them for everyday things,” said Adedeji Olowe, founder of Lendsqr.

Cash payments are projected to decrease by 4% by 2027 as digital transactions continue to gain momentum.

This change reflects the growing preference among Nigerians for more convenient and secure payment methods, according to the Global Payment Report 2024 (GPR) published by Worldpay.

Historically, cash has been the dominant form of payment in Nigeria, particularly in e-commerce.

The GPR 2024 report revealed that Nigeria leads the Middle East and Africa in cash dominance for e-commerce transactions, with cash on delivery accounting for 15% and account-to-account payments representing 32% of transactions in 2023.

Despite this stronghold, the report indicates that the reliance on cash is steadily waning.

According to the report, cash accounted for 55% of Point of Sale (PoS) transaction value in Nigeria in 2023, marking the highest share across the region.

However, the preference for digital payment methods, such as digital wallets, is on the rise. The report projects that digital wallet usage in Nigeria will grow from 18% in 2023 to 37% by 2027, while traditional payment methods like debit and prepaid cards are expected to decline.

This transition is further supported by findings from the Informal Economy Report 2024, a collaborative study by Moniepoint, the Small and Medium Enterprise Development Agency (SMEDAN), and the Ministry of Trade and Investment.

The report revealed a growing trend among Nigerian consumers towards digital payments, with 24% preferring to pay with cards and 18% opting for bank transfers. Cash, once the preferred method, has now fallen to third place, with only 15.2% of customers choosing it.

As the global trend towards digitalization continues, Nigeria is not left behind. The declining use of cash is not just a trend in Nigeria; it’s a regional phenomenon.

In South Africa, for instance, cash payments are projected to fall by 3% by 2027, with the share in PoS transactions expected to drop from 33% in 2023 to 26% by 2027.

The growing adoption of digital wallets in Nigeria is indicative of a broader shift in consumer behavior. These wallets offer a range of benefits, including convenience, security, and the ability to make transactions without physical cash.

The GPR report notes that the use of digital wallets in South Africa is also on the rise, accounting for 20% of e-commerce and 7% of PoS spending in 2023.

This digital transformation presents significant opportunities for businesses and financial institutions in Nigeria. With an increasing number of consumers embracing digital payments, there is potential for greater financial inclusion and economic growth.

However, it also poses challenges, particularly in ensuring that the necessary infrastructure and regulatory frameworks are in place to support this shift.