Nigeria Digital Payment Evolution: Progress and Challenges By Fom Gyem
Nigeria’s journey toward becoming a digital payment hub is a testament to the nation’s adaptability and innovation. From the vibrant markets of Lagos to the remote communities in the North, the shift toward cashless transactions has reshaped how Nigerians engage in commerce. The proliferation of mobile money, point-of-sale (POS) systems, and online payment platforms has introduced unprecedented convenience and efficiency. However, as with any transformative process, challenges remain, particularly in ensuring that the benefits of digitalization are accessible and equitable for all.
The recent Visa report, “Value of Acceptance: Understanding the Digital Payment Landscape in Nigeria”, underscores the immense potential of digital payments, especially for small and medium-sized enterprises (SMEs). It highlights how digital transactions can foster financial inclusion, stimulate economic growth, and empower businesses. Yet, the report also sheds light on a pressing issue: the rising cost of transaction fees, which can hinder the full realization of these benefits for many Nigerians.
The Central Bank of Nigeria (CBN) has introduced a new policy, effective March 1, 2025, including ATM withdrawal charges. Under this policy, Nigerians will incur a N100 fee for every N20,000 withdrawal at off-site ATMs, with an additional N500 surcharge at standalone cash points. While this measure may be intended to encourage cashless transactions and reduce the cost of cash management, it has sparked concerns about its impact on individuals and businesses, particularly those in underserved areas where cash remains a primary means of exchange.
The Socio-Economic Rights and Accountability Project (SERAP) has expressed reservations about the policy, describing it as potentially burdensome for ordinary Nigerians. This perspective highlights the need for a balanced approach that considers the economic realities faced by many citizens, especially in a period of rising inflation and financial uncertainty. At the same time, it is important to recognize the broader context in which the CBN operates, including the need to manage the costs associated with maintaining a robust financial infrastructure.
The digital payment revolution in Nigeria holds immense promise. It has the potential to streamline processes, reduce inefficiencies, and create opportunities for millions. However, for this transformation to be truly inclusive, it must address the concerns of all stakeholders. Transparency in pricing, affordability of services, and accessibility for underserved populations are critical factors that will determine the success of Nigeria’s digital payment ecosystem.
To move forward, several steps can be considered. First, fostering greater transparency in the pricing of digital payment services can help build trust and ensure that users are fully aware of the costs involved. Second, policymakers and regulators could explore ways to balance the need for sustainable financial systems with the goal of minimizing the financial burden on consumers and SMEs. This might include targeted interventions to support vulnerable populations and incentivize the adoption of digital payments.
Furthermore, expanding financial literacy initiatives can play a key role in addressing hesitations about digital payments, particularly in rural areas. By educating Nigerians about the benefits and practicalities of cashless transactions, stakeholders can help bridge the gap between traditional and digital financial systems.
Nigeria’s digital payment revolution is a significant achievement, and the country is well-positioned to serve as a model for other nations in Africa. However, ensuring that this transformation is inclusive and equitable will require ongoing collaboration among policymakers, financial institutions, and the public. By addressing the challenges and building on the progress made so far, Nigeria can create a digital payment ecosystem that benefits all its citizens.
As the nation continues to embrace digitalization, it is essential to keep the focus on creating a system that is not only technologically advanced but also fair and accessible. This balanced approach will ensure that the digital payment revolution truly serves as a catalyst for inclusive growth and economic empowerment.
