Interbank processing to pass USD15bn

By Lukas Ajanaku, Lagos, Nigeria

Transaction processing for banks and other financial services is set to surpass USD15 billion (2.4 trillion) this year as the Central Bank of Nigeria (CBN) intensifies the implementation of the cashless policy, which is aimed at reducing the quantity of physical cash in circulation.

Mitchell Elegbe, Managing Director/CEO, Interswitch, the transaction and switching firm that handles front-end-processors of all banks in Nigeria, most Point of Sale (PoS) and automated teller machines (ATMs) including debit and credit cards interbank transactions said the full implementation of the cashless policy at the end of March would grow the electronic payment landscape.

He said Nigeria still lagged behind many nations in terms of bank accounts, ATMs and PoS deployment. This was in spite of their being about 18 million to 20 million cards of various types -  from debit, credit, e-purse and loyalty schemes - in circulation which allows consumers and enterprises to pay and collect bills and taxes via many channels such as ATMs, banks, PoS and online.

Presently, commercial banks are working to raise the level of inter bank processing and transactions volumes to over 1100 million before the end of 2012 which would see many more Nigerians using electronic modes of payment for their transactions including payment of utility bills, tax, and banking payments.

The Central Bank of Nigeria (CBN) said cash transactions represent over 99% of customers' activities in banks. Statistics from World Bank, MobileActive, Nielsen Online, International Telecommunications Union (ITU), McKinsey, Euromonitor International, Roland Berger and Finscope show that Nigeria remains relatively unbanked compared to Germany, United Kingdom, USA, Saudi Arabia, South Africa, Namibia and Botswana.

While Nigeria has 79% of its population unbanked, Germany, United Kingdom, USA, Saudi Arabia, South Africa and Namibia and Botswana have over 59% of their population unbanked compared to Nigeria.

However, bank accounts in Nigeria have grown from seven million in 2004 to 25.4 million in 2010 at 24% compound annual growth rate (CAGR) contributed by the apex bank policy to switch from magstripe to EuroPayMastercard (EMV) chip and pin card conversion.

Share this News
Share |
Subscribe to our Daily Newsletter here