Scarcity of the naira increased reliance on mobile devices for financial transactions by 505.29 per cent in the first quarter of 2023, data from the Nigeria Interbank Settlement System has indicated.
The value of mobile transactions rose by 160.11 per cent year-on-year to N9.07tn in the first quarter of 2023.
The volume of mobile transactions surged by 505.29 per cent year-on-year to 671.93 million in Q1, 2023 from 111.01 million in the corresponding period last year.
Transaction value surged to N9.07tn in the first three months of 2023 from N3.49tn in the same period of 2022.
The growth in usage of mobile devices for financial transactions was linked to the Central Bank of Nigeria’s redesign and withdrawal limit policy which caused a naira scarcity that forced many individuals to rely on online banking services.
The policy read, “The maximum weekly limit for cash withdrawals across all channels by individuals and corporate organisations shall be N500,000 and N5m respectively.
“Customers should be encouraged to use alternative channels (Internet banking, mobile banking apps, USSD, cards/POS, eNaira, etc.) to conduct their banking transactions.”
This caused a severe naira scarcity in the country that led to a dependence on electronic transactions, with mobile becoming the preference of many.
According to GSMA, digital transactions are increasing as the use of cash slows down.
Global mobile money transactions grew by 22 per cent from $1tn 2021 to around $1.26tn in 2022. In Nigeria, mobile accounts grew to 22 per cent in 2022 from 16 per cent in 2021.
Asides from naira scarcity, the growth in digital transactions was traceable to the pandemic.
The global association of telcos puts it this way: “Our data shows that the habit of using digital payments, enforced by the pandemic, has stuck, leading to mobile money activity growth outstripping new registrations in many countries.
“This is hugely encouraging as we continue our work to drive financial inclusion around the world.”
Also, the growth in mobile money operators has given more Nigerians options to explore new payment options.
GSMA added, “In Nigeria, for example, new licenses have seen many new mobile money players emerge, and with this a 41 percent growth in the number of registered agents. Not only has this created employment for millions of new agents, but mobile money services are now accessible to more people in Africa’s largest economy.”
The growth in mobile usage has been met with many challenges, with bank mobile apps failing to open and USSD options not working becoming commonplace.
Also, security concerns exist as mobile devices increasingly become targeted during muggings and more, enabling perpetrators to access victims’ accounts.
Despite this, GSMA argued, “It is clear that mobile money is driving financial inclusion around the world. As it continues to grow, it offers an incredible opportunity to reach the 1.4 billion people who still do not have access to financial services.”
Punch
