Financial sector experts are divided over the 16 percent month-on-month, MoM, decline in the value of Point-of-Sale, PoS, transactions in January 2020.

Analysis of the latest data from Nigerian Interbank Settlement System, NIBSS, electronic payment channel shows that the value fell to N313.43 billion in January 2020 from N372.7 billion in December 2018, while the volume transactions fell by 10 percent MoM to 41.3 million during the same period.

The NIBSS data also shows that the value of mobile inter-scheme transactions (though licensed mobile payment operators) dropped by 11 percent, MoM, to N133.22  billion in January from N148.97 billion in December 2019 while the volume also dropped by 11 percent, MoM to 8.24 million in January from 7.4 million in December 2019.

Financial sector experts were, however, divided over the factors responsible for the above development as well as the future direction.

While President, Bank Customer Association of Nigeria (BCAN), Uju Ogubunka blamed the decline on unemployment and high bank charges, projecting that the trend will persist, the President, Association of Mobile Money and Bank Agents in Nigeria (AMMBAN), Victor Olojo, attributed the declines to the  usual post yuletide lull in economic activities, projecting that the trend will be reversed in the coming months.

Ogubunka said: “People make transfers and or withdrawals based on available balances/businesses. Peoples’ financial capacity has declined. Besides, there are little or no businesses to deal with. Most of what goes on right now is meeting basic needs. Nigerians are impoverished and need to be revived in order for an upward trend in mobile transfer and PoS transactions to occur.

“I foresee further decline especially, if the unemployment rate remains high and businesses relieve more employees from their jobs. Only recently, Central Bank of Nigeria (CBN) directed banks not to sack up to five employees at a time without its approval. If banks comply, what about other employers outside CBN’s jurisdiction? What if banks sack only four, do they need approval?

“Besides the foregoing, the issue of charges might have also played a part in the decline. Most people want to avoid cost as much as possible.

“The solutions are in the economy growing so that people can have growth also in their account balances and moderating the charges for such transactions.”

On his part, Olojo sees an uptick in the volume and value of mobile transfers and PoS transactions despite the decline in January which he ascribed to sluggish business activities and government policies.

He said: “I think this is something I can refer to as a normal trend. Usually in December we have so much high volumes of economic activities. It is actually expected for us to see a peak in December and a decline in January.

“Of course we know after so many expenses must have taken place in December, we expect business to become slow in January which is a sluggish month because the high volume of activities has taken place in December.

“However, we cannot rule out the fact that the number of factors including policies from government have contributed to the decline. There are also issues around security. We have had several issues regarding security around PoS, like situations where robbers use PoS terminals to rob customers. All these discourage people from using PoS to make transactions.

“Regarding 7.5 percent VAT, to a large extent I don’t think that will change the behavioural attitude of customers in terms of PoS usage. I feel that Nigerians will get used to it. They have to pay. Not everyone have cash all the time. Some people will still prefer to use their cards.

“We expect an upward trend in the volume and value of PoS and mobile transactions from February, March compared to what took place in January.”

Vanguard