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Nigeria Takes Center Stage in Global Movement Toward Digital Payments, Witnessing a 59% Increase Over the Past Decade

Before the establishment of Enza, the leadership was responsible for managing international approvals, processing, and consumer finance sectors at Network International.

World leads in embracing digital payments as Nigeria witnesses a 59% increase over the past decade
World leads in embracing digital payments as Nigeria witnesses a 59% increase over the past decade

Nigeria Takes Center Stage in Global Movement Toward Digital Payments, Witnessing a 59% Increase Over the Past Decade

Nigeria is witnessing a significant shift towards digital payments, with cash transactions becoming increasingly obsolete. This transformation is driven by a combination of technological, psychological, regulatory, and economic factors.

Uchenna Uzo, a marketing professor at Lagos Business School, has stated that Nigerians are increasingly embracing non-cash transactions. The preference for digital transfers, particularly for high-value purchases, is due to the enhanced security and record-keeping they offer. Even in informal settings, cash still dominates low-value and social payments, but digital usage is growing rapidly, especially among younger users and in urban centres like Abuja and Lagos.

The expansion of affordable smartphones and data packages has enabled mobile banking and payment capabilities to reach wider populations. This technological infrastructure has been a crucial catalyst for the digital payment revolution in Nigeria.

Government initiatives have also played a significant role in promoting digital currency adoption. The Central Bank of Nigeria's (CBN) endorsement of digital currencies, such as the e-Naira, and policies offering reduced transaction fees and tax benefits encourage merchants and consumers to embrace digital payments.

Nigeria’s integration of instant, low-cost real-time payments has further fuelled faster, safer transactions, strengthening financial inclusion and economic growth expectations. This real-time payment system has been instrumental in fostering the digital payment ecosystem in the country.

Despite the lack of concrete figures for cash usage in Nigeria by 2030, global and regional analyses generally forecast a significant reduction in cash dependency. Some estimates suggest that cash usage could fall below 10% of total payment transactions in rapidly digitizing economies like Nigeria by 2030, given sustained infrastructure, policy, and consumer behaviour shifts.

The CBN's naira redesign policy, introduced to curb cash hoarding and tackle illicit financial practices, has led to a severe cash shortage. Currency circulation dropped by 29.2% to just ₦982.1 billion in February 2023. The dominance of cash transactions in Nigeria has decreased significantly, with cash transactions making up less than half of all payments in the current year (2023), as compared to 91% in 2019.

Electronic transaction volumes in Nigeria have seen a dramatic increase, rising from 793 million in 2018 to 11.3 billion by 2024. This shift towards digital payments is a remarkable trend, as shown by the data from the Nigeria Inter-Bank Settlement System (NIBSS).

Fintech companies like OPay and PalmPay have stepped in as major players, delivering smooth and efficient digital payment services in Nigeria. The popularity of mobile wallets, fintech platforms, and digital banking solutions is on the rise, contributing to the country's steady progress towards a cashless economy.

Nigeria is positioning itself as a global leader in the move towards a cashless economy. This transition, backed by technological, psychological, regulatory, and economic factors, is expected to continue, with cash usage declining substantially though exact 2030 figures are not concretely established in current available sources.

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