How the Nigerian Payment Industry Fared in 2022

As the year 2022 ended, there was a huge revolution in various sectors; and the Nigerian payment
industry not left out. We want to review the different activities that coloured the Nigeria payment
landscape in 2022.
The year 2022 saw the continued rise of Nigeria tech start-ups funding. As of August, a total of
$747,908,000 was raised by 107 fintech start-ups in Nigeria. To show the growth of the fintech
space, Nigeria’s fintech unicorns have grown to five with Flutterwave, Opay and Andela attaining
unicorn status last year, joining Interswitch and Jumia.
While the fintech sector has grown in the year, there is more to be done as there are still gaps to fill.
Across the fintech spectrum, the payment and remittance, lending and finance sub-sectors showed a
lot of activities. The Blockchain and invest tech sub-sectors showed significant increased activities.
However, the Insure-tech and secure & ID tech are still lagging. It is therefore important to
deliberately grow investors’ confidence to push for long term investment, increased funding and
diversification into less performing fintech spaces such as insure-tech, open banking and security
&ID.
The year also saw an increase in enrolments for Biometric Verification Number (BVN) by bank
account owners. According to the data released by the Nigeria Inter-Bank Settlement System
(NIBSS), a total of 4.3 million new BVN registrations bringing the total number of BVN to 56 million.
With a total of 133.4 million account numbers, it shows that there is still more to be done. However,
there is the situation where a single BVN is linked to multiple account numbers. Concerted efforts
should be put in place by the CBN and the banks to increase enrolment as this unique identity (BVN)
adds protection to the sensitive and personal information of the owners and drives security and ID
The Central Bank of Nigeria announced the launch of a national domestic card scheme. According to
the apex bank, the scheme is geared towards accelerating financial inclusion and deliver lower cost
payments services that are more accessible and affordable for Nigerians.
The existing card schemes in the Nigeria market leveraged the growing card payment market and
accelerated cashless transactions. The popular card schemes in Nigeria are Mastercard, Visa and
Verve with the first two being international card schemes and the third being a successful domestic
card scheme with international footprints.
Prior to 2009 the Nigerian payment space was dominated by the international card schemes. This
meant that there was no domestic card scheme specifically tailored to the local consumer. By 2009,
the Verve card scheme was introduced into the Nigeria market as a domestic card scheme
addressing specific local nuances such as low cost, quicker processing time, wider acceptance by
Nigerians and Africans across all social strata. The Verve Card scheme seems to have been expanding
its products and benefits to also carter to the digital and web payment needs of customers on the
global stage.
Although, CBN in a statement issued by CBN Director, Corporate Communications, Mr. Osita
Nwanisobi, pointed out that the proposed national domestic scheme could further enhance data
sovereignty, enabling the development of locally relevant products and services and reduces
demands on foreign exchange; financial experts believe that government can actually support

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existing domestic cards such as Verve, with favourable policies and funding to enable them perform
even much better rather than compete against it.
As Nigerians race to beat the deadline of depositing their old naira notes to make way for the new
naira notes, following the CBN’s announcement to redesign the Naira, Nigeria is still somewhat a
‘cash-heavy’ economy. According to the CBN, the redesign of the Naira is part of its move to reduce
the economy’s heavy dependency on cash and make cashless alternatives more acceptable. Experts
believe that this will drive the adoption of digital payment options including cards.
A 2021 survey shows that cash and debit cards are the most common payment methods chosen in
stores, restaurants, and similar outlets. As of November 2022, Nigerians spent N318.66 trillion on
electronic transactions, a 41.75% increase from the N224.79 trillion in transaction value that was
registered over the same period in 2021.
To achieve the planned cashless drive, the CBN should engage with the card companies, fintechs and
banks to build thriving business environment for all the players, create policies that safeguard their
continued profitability and implement initiatives that guarantee growth of the ecosystem for the
benefit of the players and Nigerians. The CBN and similar regulatory agencies should build
confidence that will encourage increased private investments and players in the space rather than
stifling existing players out of the market.
This year also saw an increase in Agent Banking with an all-time high of about 1.4 million agents
spread across the country, through the Shared Agent Network Expansion Facility (SANEF).
Consequently, the volume of PoS transaction rose by 24.3 % to 878.4 million as of September 2022,
from 706.8 million in corresponding time last year. The value stood at 4.6trillion.
Agent Banking channel is expected to bring financial services closer to the unbanked and
underbanked segment of the society. Experts say the business model have been adopted by young
people and women to reduce the unemployment gap. It is therefore important that the government
provides infrastructure, favourable policies that ensure their continuity and profitability.
According to NIBSS, there was a 153% growth in the use of mobile for financial transactions,
surpassing the N8 trillion recorded in 2021. The surge was bolstered by the rising mobile
connections across the country. According to the Nigerian Communications Commission (NCC),
active subscriptions for mobile services across the networks of MTN, Airtel, Globacom and 9mobile
hit 218.6 million in November 2022.
Following the introduction of the payment service banks (PSBs) licence aimed at achieving 95%
financial inclusion by 2024, to boost financial inclusion, especially in rural areas and facilitate
transactions, three more licenses were awarded to Telecommunications companies such as MTN
(Momo PSB), Airtel (SmartCash PSB) and Globacom (Moneymaster PSB). This has given customers
more options to traditional banking services.
In all, despite the huge achievements seen in the Nigerian fintech space, there is still room for more
growth in the industry. All the players should play their roles with the intention of growing the
industry. The government should ensure a level playing field for all the players, implement policies
that will attract longer term investors. The recent policies by the CBN have left very little to be
desired. From the controversial cash withdrawal policy to the international transaction limit, and the
domestic card launch. All of these policies are stifling the industry and casting doubts on the CBN’s
ability to sustain the industry and drive economic growth.