The value of transactions carried out over Point of Sale (PoS) terminals in the country dropped by N16 billion in January this year compared to the figure achieved in December 2016, as Nigerians slowed shopping after the frenzy of the yuletide.
A report by Nigeria Inter-Bank Settlement System (NIBSS) the industry Payments Terminal Service Aggregator (PTSA), stated that value of transactions over the platform in December 2016 was N108 billion dropping to N91 billion in January this year.
More so, volume of transactions was also affected as volume in December recorded 8.9million compared to 7.9 million it recorded in January this year.
Financial technology experts described the situation as normal in view of the fact that December is a festive period when Nigerians make a lot of purchases for the Christmas and New Year celebrations.
“But in January not much shopping is done at this period as people have exhausted their cash during the festivity. This is the reason for the drop in both transaction value and volume on the PoS platform,” they said.
Tunde Ogungbade, managing director, Global Accelerex Limited, commended Central Bank of Nigeria (CBN) for formulating policies that are increasing the deployment of PoS in the country.
“The CBN has done a great job working with the industry players, especially, the Payment Terminal Service Providers (PTSPs) that have played a significant role in Nigeria with adoption of PoS terminals through the Cashless and Cash lite Initiative that started in 2011. The association of PTSPs of Nigeria, for example, has been engaged from time to time to contribute and provide input on policies.”
“It is my view that the current policies are good; nevertheless, there is always room for improvement. For example, a new policy for migration from MSC to Interchange Fees is a welcomed development that will be a major driver for industry growth. Global Accelerex will continue to work with regulators and other players to ensure rapid adoption of policies,” he said.
He however, attributed the lopsided growth observed in the use of PoS in major cities of the country e.g. Lagos, Abuja, Port Harcourt against other states and cities to the economic activities in those regions vis-à-vis the major city.
“In addition, the cashless campaign done across the nation focused more on major metropolis than the hinterland. Furthermore, the level of awareness in major cities has fueled more rapid adoption in the major cities. For example, Lagos, Abuja, and Port Harcourt constitute a huge part of all the POS transaction that are done in Nigeria, though other areas are steadily growing. We have started observing growth and adoption in other cities, for example, Owerri in Imo State, Gombe State and Delta State etc.,” he added.
Reacting to this development, Mrs. Regha Onajite, chief executive officer, Electronic Payment Providers Association of Nigeria (EPPAN) said that a lot of people have not really embraced the PoS but, that is not a challenge.
“The PoS is only a channel for electronic payment. We have so many other channels like the Mpos, mobile, ATMS, web/online, instant payments etc. so the PoS is one of many other choices.”
“The CBN and the operators should focus on awareness creation for further adoption. During the early days of the Cashless initiative, E-PPAN under the aegis of the CBN and the support of the financial institutions had massive awareness campaign especially below the line campaign in addition to what the banks, the central bank and other providers were doing with above the line campaign to promote the understanding and adoption of electronic payments channels. This I will say has to be sustained.”