Point-of-Sale (POS) transactions in Nigeria saw a significant drop in value during the first quarter of 2024, with a decrease of N225.73 billion compared to the same period last year.
This decline, totaling 7.94%, highlights a shift away from POS systems as cash circulation outside banks increases.
Data from the Nigeria Inter-Bank Settlement System (NIBSS) and the Central Bank of Nigeria (CBN) reveal contrasting trends in POS transactions and cash circulation, painting a complex picture of financial habits in Nigeria.
Although CBN data for March 2024 is pending, analysis of cash outside banks is limited to February 2024.
Breakdown of POS transactions in Q1 2024:
January 2024: POS transaction values reached N850.09 billion, surpassing January 2023 figures.
February 2024: Transaction values decreased to N805.05 billion from N883.45 billion.
March 2024: Transaction values further dropped to N961.86 billion compared to N1.15 trillion in March 2023.
Total transactions for Q1 2024 amounted to N2.62 trillion, falling short of the N2.84 trillion recorded in Q1 2023.
The decline in POS transaction values is mirrored by a drop in transaction volumes:
January 2024: Transaction volumes rose to 112.78 million from 96.35 million in January 2023.
February 2024: Volumes decreased to 97.57 million from 113.53 million.
March 2024: Volumes further declined to 103.65 million from 177.93 million in March 2023.
Total transaction volumes for Q1 2024 were 314 million, down by 73.81 million from Q1 2023.
This decline in POS transactions coincides with a surge in cashless transactions following the cash shortage in Q1 2023. The recent increase in cash holdings outside banks suggests a reversal of this trend or emerging changes in consumer transaction behavior.
Despite the decline in POS transactions, the number of registered POS terminals increased:
By March 2023: 2,537,422 terminals.
By March 2024: 3,730,441 terminals, marking a 47.02% increase.
The rise in terminal registrations may indicate continued infrastructure expansion despite reduced POS usage.
Increased cash holdings outside banks are evident:
January 2024: Cash outside banks reached N3.28 trillion, up 314% from January 2023.
February 2024: Cash holdings escalated to N3.411 trillion, marking a 305% increase from February 2023.
Currency in circulation also rose significantly.
These figures suggest a period of adjustment and trust recalibration in cash-based transactions, echoing challenges from the previous year’s cash scarcity.
With more cash held outside banks, reliance on POS transactions seems to have diminished, yet POS terminal registrations continue to grow, indicating ongoing infrastructure development for cashless transactions.