On January 26, 2025, a report from the Central Bank of Nigeria (CBN) revealed that during the first half of 2024, Nigerians conducted a staggering N85.91 trillion worth of transactions using point-of-sale (POS) terminals. This amount is over seven times greater than the N12.21 trillion spent at ATMs in the same period.
This significant change in how Nigerians are paying for goods and services highlights a growing preference for POS systems over cash withdrawals from ATMs. Many people have been facing issues such as running out of cash at ATMs and long waiting lines, making POS transactions a more convenient choice.
When we compare these numbers to 2023, the increase in POS transactions is quite impressive. The total value of these transactions jumped by 77%, going from N48.44 trillion in 2023 to N85.91 trillion in 2024. Additionally, the number of individual transactions increased by 31%, rising from 4.87 billion to 6.39 billion.
This trend can be attributed to the widespread availability of POS terminals across Nigeria, which make it easier for people to make cashless payments. In contrast, ATM transactions saw a decline in both value and volume. The total amount withdrawn from ATMs dropped from N14.63 trillion in 2023 to N12.21 trillion in 2024, a decrease of about 16.6%. The number of ATM transactions also fell slightly from 519.52 million to 496.43 million.
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Looking back to the end of 2022 and the beginning of 2023, POS transactions experienced a remarkable surge due to a cash shortage in the country. The value of transactions skyrocketed by 205%, from N15.86 trillion in 2022 to N48.44 trillion in 2023, and the number of transactions surged by 185%, from 1.71 billion to 4.87 billion.
During the same period, ATM transactions had mixed results. The value increased from N12.64 trillion in 2022 to N14.63 trillion in 2023, which is a rise of 15.8%. However, the number of ATM transactions dropped significantly from 713.69 million to 519.52 million, indicating that while fewer people were using ATMs, those who did were withdrawing larger amounts.
These statistics underscore a growing trend in Nigeria where people are relying less on physical cash and embracing electronic payments.
Further analysis shows that internet banking is also on the rise, with transaction values more than doubling from N462.17 billion in 2023 to N825.5 billion in 2024. The number of online transactions also increased slightly, from 11.32 million to 11.64 million.
Mobile payment platforms are experiencing strong growth as well. The value of mobile transactions rose from N97.06 billion to N159.42 billion, marking a 64% increase. The volume of mobile transactions also surged by 50%, from 2.33 billion to 3.49 billion, reflecting the growing use of smartphones and mobile banking services.
On the other hand, cheque transactions are continuing to decline as fewer people rely on traditional banking methods. The value of cheque transactions increased slightly from N6.97 trillion in 2023 to N8.74 trillion in 2024, which is a 25.5% rise. However, the number of cheque transactions fell from 8.13 million to 6.88 million, showing a 15% decline.
Overall, these figures demonstrate the rapid digital transformation of Nigeria’s payment systems, with POS transactions, mobile payments, and internet banking leading the way.
Interestingly, the increase in POS transactions occurred even though there were complaints about rising fees for using these services. In December 2024, POS agents raised their fees significantly, charging as much as N200 for a withdrawal of N5,000. Many Nigerians had no choice but to rely on POS services since ATMs were often out of cash or had long lines.
Inside the banks, customers faced similar challenges, as many were turned away due to a lack of cash. In rare cases where cash was available, customers were limited to withdrawing only N10,000 or N20,000.
Despite a warning from the CBN that banks would face penalties for not providing cash at ATMs, nine banks were fined a total of N1.35 billion for failing to comply during the holiday season. Each bank received a fine of N150 million after inspections revealed they were not following the cash distribution guidelines.
The CBN’s fines were deducted directly from the banks’ accounts. The banks affected include Fidelity Bank, First Bank, Keystone Bank, Union Bank, Globus Bank, Providus Bank, Zenith Bank, United Bank for Africa, and Sterling Bank.
Moreover, even after the holiday season, the high fees for POS transactions continued. POS operators explained that the fee increase was due to a severe cash shortage caused by banks limiting withdrawals and the introduction of a new N50 charge for electronic money transfers over N10,000.
This electronic money transfer levy is a one-time fee applied to any electronic receipt or transfer of money deposited in any bank account for amounts of N10,000 or more. The government started enforcing this policy on December 1, 2024, across various digital payment platforms, which control about 70% of the POS market.
However, as POS transactions have surged, there has also been a rise in fraud associated with this payment method. Reports indicate that cases of fraud linked to POS transactions increased by 31.12% in the first quarter of 2024. For example, the number of reported fraud cases involving POS terminals rose from 2,683 in the fourth quarter of 2023 to 3,518 in the first quarter of 2024.
In summary, the data from the CBN highlights a major shift in how Nigerians are making payments, with a clear move away from cash and towards digital transactions. While this transition offers convenience, it also brings challenges, including rising fees and concerns about fraud.
