Market Research Report
Payments Landscape in Nigeria: Opportunities and Risks to 2022
|Published by||GlobalData||Product code||604397|
|Published||Content info||47 Pages
Delivery time: 1-2 business days
|Payments Landscape in Nigeria: Opportunities and Risks to 2022|
|Published: February 14, 2019||Content info: 47 Pages||
The use of cash for consumer payments remains highly prevalent among Nigerians, especially among the rural population; this is primarily due to a limited public awareness of other instruments and limited access to banking infrastructure. However, the Central Bank of Nigeria (CBN) has taken a number of steps to improve this situation. The latest of these is the introduction of rules for establishing Payment Service Banks. As part of its Financial System Strategy 2020, the CBN is focusing on bringing unbanked consumers under the purview of the banking system, as well as promoting electronic payments in the country.
Banks are also attempting to address this issue by launching basic and low-cost banking accounts, expanding payment infrastructure, and making efforts to change Nigerian consumer payment habits. A rise in the economically active population, the advent of digital-only banks, the growing popularity of online shopping, the gradual acceptance of cards among retailers and the proliferation of new payment solutions will help drive electronic payments in Nigeria.
To augment the CBN's financial inclusion program, commercial banks in Nigeria are striving to provide unbanked individuals with access to formal financial services by expanding the banking agent network in new regions, as well as launching self-service terminals. Similarly, mobile money operators and telecom companies are actively participating in the financial inclusion program.
Pay-later cards are not popular in Nigeria, with a penetration of 0.7 cards per 100 individuals - the lowest among peers such as South Africa and Egypt. The higher adoption and use of credit cards was partially hindered by prevailing economic uncertainty in the country, due to which banks have become wary of unsecured consumer lending. However, this market is expected to register robust growth in terms of transaction value and volume over the forecast period, supported by the growing demand for consumer credit - especially among the increasing middle-class population and high income consumers.
The Nigerian e-commerce market recorded a robust review-period compound annual growth rate (CAGR) of 29.8%, rising from NGN163.1bn ($448.56m) in 2014 to NGN462.9bn ($1.27bn) in 2018. To benefit from this trend, banks and investment companies are launching their own e-commerce platforms in the market. While traditional payment instruments - including cash/cheques, bank transfers and payment cards - remain the preferred method of payment for online shoppers in Nigeria, alternative payments such as KongaPay, Paga and PocketMoni are also being used for e-commerce purchases.
The report "Payments Landscape in Nigeria: Opportunities and Risks to 2022", provides a top-level market analysis, information and insights into the Nigerian cards and payments industry, including -