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Home Fintech <strong>CBN’s Naira Redesign Policy did not Improve Electronic Payments</strong>

CBN’s Naira Redesign Policy did not Improve Electronic Payments

In February, ePayment saw a string of failed transactions, which caused it to plunge 4.83 percent to N37.67 trillion from N39.58 trillion in January 2023.

Statistics from the Nigerian Inter-Bank Settlement System (NIBSS) shows that there was a monthly increase of 41.29 percent in the use of e-payment gateways.

In February, 901.46 million cashless payment gateways were used, up from 638 million in January. The value of all cashless transactions declined in February despite an increase in usage, suggesting that there were more failed transactions.

This runs counter to the notion that the Central Bank of Nigeria’s stance regarding the redesign of the Naira will result in more electronic transactions taking place in the nation.

The Naira redesign strategy will promote increased financial inclusion and other types of electronic transactions, the top bank has emphasized on numerous occasions.

Inadequate Infrastructure

The policy has led to the country’s present cash crisis, an economic catastrophe that has forced many Nigerians to turn to electronic channels. Yet, a large number of the unsuccessful transactions were noted as the result of a weak network infrastructure.

It has been challenging to record the number of unsuccessful transactions since 2020 since the NIBSS hasn’t updated the efficiency platform portal, which shows the number of failed transitions and other data.

The Nigeria Immediate Payment System and Point of Sales terminals’ cashless transactions are recorded by the NIBSS, the primary payment switch in the nation. The overall NIP (immediate payments) decreased to N36.79 trillion in February from N38.772 trillion in January.

The data from NIBSS showed that the value of PoS transactions increased from N807.16 billion in January to N883.45 billion in February, notwithstanding the shortage of naira that was observed in the month.

Mobile transfers were used 183.69 million times in February compared to 108.14 million times in January, making them the principal payment method for many Nigerians.

While usage increased significantly, transaction value only slightly increased (7.88%) from N2.37 trillion in January to N2.56 trillion in February. This was similar to the month-long struggle many Nigerians endured with numerous unsuccessful cellphone purchases.

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