The recent upward revision of prices in the unified price list for Point of Sales (PoS) transactions has sparked concerns among experts who predict challenges for businesses and customers in the region.
The new price list, which comes amidst high inflationary pressures and an economic downturn, is expected to drive an increased use of other payment channels, such as Automated Teller Machines (ATMs), mobile banking apps, and USSD (Unstructured Supplementary Service Data).
Israel Odubola, a Lagos-based research economist, highlighted the potential impact of the revised prices on the adoption of digital payment platforms.
“We should acknowledge that an average Lagos resident is faced with inflationary pressure on basic goods and services following recent government policies,” said Odubola. “This revision will likely propel people to embrace digital platforms more, particularly in areas with a high banking presence where the impact of the revision will be muted.”
However, Chinasa Collins-Ogbuo, the head of the Inclusion for all Initiative at Africa Practice, noted that for vulnerable groups currently dependent on mobile agents, who are driving account usage for financial inclusion, the higher costs could threaten their ability to utilize these services.
Collins-Ogbuo expressed concerns that the revision might discourage the unbanked population from accessing banking services, particularly in areas where bank branches and ATMs are not readily available.
The Association of Mobile Money and Bank Agents in Nigeria, through its spokesman Stephen Adeoye, defended the price increase, citing economic challenges and rising costs of materials and maintenance.
Adeoye explained, “Looking at the price of paper and fuel as well as the cost of maintenance, so people won’t just get to withdraw money anyhow.”
However, experts caution that these increased charges may adversely affect PoS businesses, as they might not be able to pass the additional costs onto their customers.
Temitope Omosuyi, an investment strategy manager at Afrinvest Limited, higlighted the importance of providing optimal value to customers, particularly in an inflationary environment.
Omosuyi stated, “There are other competitive, cheaper, and effective alternatives that consumers can rely on.”
The surge of electronic transactions in Nigeria has been remarkable, with electronic payment transactions reaching a staggering N123.8 trillion in the first quarter of 2023, representing a 44.6 percent increase compared to the same period in 2022.
Mobile transfers, in particular, saw a significant rise in volume and value. However, the use of traditional methods, such as cheques, continued to decline during the same period.
