2024 POS transactions surpassed ATM utilization by 603% – CBN

Nigerians made transactions value N85.91tn by means of point-of-sale terminals within the first half of 2024, a determine that’s over seven instances the N12.21tn recorded for ATM transactions inside the identical interval.

This knowledge, sourced from the Central Bank of Nigeria’s quarterly statistical bulletin, displays a major shift in shopper preferences as POS turns into the dominant cost technique, and the shortage of money at ATMs and prolonged queues persist.

When in comparison with 2023, the worth of POS transactions noticed a 77 per cent enhance, rising from N48.44tn to N85.91tn, whereas the amount of transactions grew by 31 per cent, from 4.87 billion to six.39 billion.

This development will be attributed to the widespread availability of POS terminals and the benefit they supply for cashless transactions throughout the nation.

In distinction, ATM transactions dropped in worth from N14.63tn in 2023 to N12.21tn in 2024, a 16.6 per cent decline, whereas their quantity additionally fell barely, from 519.52 million to 496.43 million.

Evaluating 2023 to 2022, POS transactions demonstrated extra sturdy development, because the nation battled money shortage on the finish of 2022 and the beginning of 2023.

The worth of transactions jumped by 205 per cent, from N15.86tn in 2022 to N48.44tn in 2023, whereas the amount surged by 185 per cent, from 1.71 billion to 4.87 billion.

In the meantime, ATM transactions confirmed a blended development throughout this era. The worth rose from N12.64tn in 2022 to N14.63tn in 2023, representing a 15.8 per cent enhance.

Nevertheless, the amount dropped considerably from 713.69 million to 519.52 million, suggesting that whereas fewer transactions have been performed, they have been of upper worth.

These figures spotlight the diminished reliance on bodily money withdrawals as digital funds achieve traction.

Additional evaluation reveals that web banking transactions greater than doubled in worth, rising from N462.17bn in 2023 to N825.5bn in 2024.

The quantity of web-based transactions additionally elevated, albeit modestly, from 11.32 million to 11.64 million.

Equally, cellular cost platforms continued to document robust development, with the worth of transactions rising from N97.06bn to N159.42bn, a 64 per cent enhance.

The quantity of cellular transactions surged by 50 per cent, from 2.33 billion to three.49 billion, reflecting the rising adoption of smartphones and the accessibility of cellular banking providers.

Cheque transactions, nevertheless, continued their decline, a mirrored image of the dwindling reliance on conventional banking strategies.

The worth of cheque transactions in 2024 elevated barely to N8.74tn from N6.97tn in 2023, a 25.5 per cent rise, however the quantity fell from 8.13 million to six.88 million, marking a 15 per cent decline.

The information highlights the fast digitalisation of Nigeria’s cost techniques, with POS, cellular funds and web banking main the cost.

The surge in POS transactions occurred regardless of the arbitrary enhance in expenses widespread in the direction of the tip of the yr.

In December 2024, POS brokers hiked expenses by about 100 per cent, amassing as much as N200 per N5,000 withdrawals.

Many Nigerians have been on the mercy of POS operators as most banks’ ATMs have been empty.

Contained in the banks, there was no reprieve as a lot of the banks turned their clients again for lack of money, and in uncommon circumstances the place the shoppers have been capable of get money, they have been restricted to N10,000 or N20,00 withdrawals.

This occurred regardless of a warning to the banks by the CBN that any financial institution discovered not meting out money through ATMs could be sanctioned.

The CBN just lately sanctioned 9 Deposit Cash Banks with fines totalling N1.35bn for failing to make sure money availability through Automated Teller Machines throughout the festive season.

Every of the banks was fined N150m following spot checks that exposed non-compliance with the apex financial institution’s money distribution tips.

The affected banks embrace Fidelity Bank Plc, First Financial institution Plc, Keystone Bank Plc, Union Financial institution Plc, Globus Bank Plc, Providus Bank Plc, Zenith Bank Plc, United Financial institution for Africa Plc, and Sterling Bank Plc.

The fines shall be instantly debited from the banks’ accounts with the CBN.

Additional checks by The PidomNigeria confirmed that the excessive POS transaction cost persists even after the festive interval.

Earlier, POS operators attributed the rise to extreme money shortage brought on by banks rationing withdrawals and the implementation of the Digital Cash Switch Levy of N50 by the Federal Inland Income Companies charged on any digital influx of N10,000 and above.

The stamp responsibility or digital cash switch levy is a single, one-off cost of N50 on digital receipt or switch of cash deposited in any business cash financial institution or monetary establishment on any sort of account on sums of N10,000 and above.

On December 1, 2024, the Federal Authorities started imposing the coverage throughout fintech platforms reminiscent of OPay, Moniepoint, Kuda, and others.

The fintech operators dominate about 70 per cent of the POS agent market.

Additionally, with the surge in POS transactions, there have been rising circumstances of fraud by means of this cost system, amongst different considerations.

The prevalence of fraud and forgery in Nigeria’s cost system has proven a major shift within the first quarter of 2024, with POS transactions experiencing the best enhance in fraudulent actions.

In keeping with the Fraud and Forgeries Report in Nigerian Banks for the primary quarter of 2024 by FITC, POS fraud circumstances surged by 31.12 per cent in Q1 2024.

In This fall 2023, there have been 2,683 reported circumstances of fraud related to POS terminals. Nevertheless, this quantity escalated to three,518 circumstances by Q1 2024.

POS fraud circumstances made up 30.67 per cent of the whole fraud circumstances (11,472) recorded within the quarter beneath evaluation.

Additionally, fraud circumstances involving laptop, cellular, and point-of-sale techniques accounted for almost all of fraudulent actions recorded in Nigeria throughout the second quarter of 2024.

This led the CBN to introduce a every day cash-out transaction restrict of N100,000 per particular person buyer for Level-of-Sale brokers.

In keeping with the apex financial institution, this was as a part of new measures to advance the cashless coverage in Nigeria, in addition to fight fraud.

The CBN said that brokers are restricted to a cumulative cash-out restrict of N1.2m per day, whereas clients face a most money withdrawal restrict of N500,000 per week.

To make sure accountability, the CBN has mandated that every one company banking transactions have to be performed completely by means of float accounts maintained with the principal establishments.

Additionally, all agent banking terminals have to be linked to the Funds Terminal Service Aggregator, and every day transaction studies, together with withdrawal limits and float account balances, have to be electronically submitted to the Nigerian Inter-Financial institution Settlement System utilizing a reporting template offered by the CBN.

The round emphasised that principals of agent banking operations should monitor accounts linked to brokers’ Financial institution Verification Numbers to detect any unauthorised actions exterior the designated float accounts.

It additional reiterated that principals could be held absolutely accountable for the actions and omissions of their brokers in relation to banking providers.

To make sure compliance, the CBN introduced plans to conduct periodic oversight and impromptu backend configuration checks.

Any breaches of the directive, the round warned, would appeal to penalties, together with financial fines and administrative sanctions.