See the preferred mod of financial transactions among Nigerians

• A recent report has highlighted the significant shift in financial transactions, with more Nigerians embracing online transfers
• The report stated that fewer Nigerians now patronize ATMs, as online transfers surged by over 2,000% in 10 years
• It stated that online transfers surged to N783.6 trillion, representing a 2,610.15% increase and a 43.78% yearly gain.

Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment, and the economy for over a decade.

A new report indicates that online transfers are gaining ground in Nigeria, relegating Automated Teller Machines (ATMs) to the background.

The report attributed the trend to Nigeria’s growing smartphone usage and mobile applications by banks and fintech for financial transactions.

A new report shows Nigerians' preferred mode of financial transactions Credit: Bloomberg / Contributor
Source: Getty Images

Nigerians ditch ATMs for online transfers

Nigeria has seen a significant shift in how Nigerians carry out transactions, with online transfers surging to N2,610.5% in the past decade.

‘The Nigerian Payment Report’ by Zone clarified how online transfers have replaced ATMs as Nigerians' primary mode of financial transactions.

This surge in digital payments has led to a decline in the use of ATMs for transactions.

The report said that in 2012, during the launch of Payment Vision (PSV2022) by the Central Bank of Nigeria (CBN), the aggregate value of ATM transactions in Nigeria stood at N1.98 trillion, while the volume of online transfer payments stood at N31.57 billion.

Online transfers hit N783.6 trillion in 10 years

According to the report, in the next 10 years, the country witnessed a boom in online transfers. ATM transactions hit about N32 trillion, while online transfers surged to N783.6 trillion, representing a 2,610.15% increase and a 43.78% yearly gain.

Data from the report also indicated that while the total volume of transactions rose by 36.26% from N10.32 trillion to N14.06 trillion in the same period, the total transaction value for online transfers rose sharply from N545.03 trillion in 2021 to N783.66 trillion in 2022, a 43.78% every year.

Mobile apps boost online transfers

Leadership reports that recent data by the Nigeria Inter-Bank Settlement System (NIBBS) indicated that the volume of electronic payment transactions in Nigeria increased to N600 trillion in 2023, a 55% increase from N387 trillion in 2022, attributed to the rising adoption of digital payment platforms.

The NIBBS report said the growth shows an improved digital payment infrastructure, allowing firms to encourage online payments and reflecting growing customer confidence in digital platforms for P2P, e-commerce, and bill payment.

The report said:

“Concurrently, the total transaction value rose from N8.06 trillion in 2021 to N19.4 trillion in 2022, marking a significant 140.73 per cent year-on-year increase. The convenience and accessibility offered by mobile money services, particularly in remote or unbanked areas, have been key drivers of this growth.”

Nigerian banks lose N9.5 billion to electronic fraud

Legit.ng earlier reported that Nigerian banks have lost a massive N9.5 billion to electronic fraud from January to August 2023.

The development comes as the Nigeria Electronic Fraud Forum (NeFF), on Friday, August 18, 2023, called for new standards and increased partnerships to curtail the rising cases of electronic fraud.

The Forum revealed this at its third-quarter general meeting in Lagos focused on New Strategies for Combating e-fraud in a Cashless Environment.

Wema Bank issued a warning regarding new banking cyber threats targeting Android devices.

The bank said the malware is called "Brokewell" and has cautioned customers to remain alert and never download.

Wema Bank explained that the malware is designed to steal sensitive information such as banking details and personal data, and is being spread through various means, including phishing emails and malicious websites.

10 countries where Nigerian bank customers fell victim to fraud

A previous report by Legit.ng disclosed that in the past five years, Nigeria’s financial industry has seen an increase in fraudulent activities and a growth in digital payment transactions.

The annual fraud rate spiked by 11%, from 44.947 cases in 2019 to 95,620 in 2023, with corresponding losses rising by 496% from N2.9 billion to N17.67 billion during the same period.

Also, the ratio of the total reported fraud cases to the value of transactions has slightly risen from 0.0019% in 2019 to 0.0022% in the past year, showing the growing challenge of fighting fraud in the digital economy.

Source: Legit.ng