Transactions over Point of Sale terminal (PoS) across the country recorded 49 percent rise over the past year, suggesting a growing acceptance of the use of online payments, Nigeria CommunicationsWeek can now reveal.
According to report exclusively gathered from National Central Switch (NCS) being operated by Nigeria Inter-Bank Settlement System (NIBSS) the Payments Terminal Service Aggregator (PTSA) for the industry, the value of transactions recorded 49 percent increase from N24 billion in the June 2014 to N35 billion as at the end of May, 2015.
Also, the volume of transaction on the machine stood at 1.6 million in June 2014, while in May 2015 it increased to 2.7 million representing 60 percent increase.
Reacting to this increase, Tunde Ogungbade, managing director, Global Accelerex, a PoS terminal services provider, attributed the increase to Central Bank of Nigeria (CBN) extension of cashless initiative across the federation.
“We anticipated more and believe that once other policies, such as those that promote cash deposits and withdrawals are rescinded, more consumers and merchants will move towards cashless commence which will lead to more growth.
In addition, merchants and consumers alike who have benefited from the impact of this convenience with business and lifestyle in Lagos, have evangelized such benefits to trading partners outside Lagos, further driving momentum. Major growth will be in urbanized commercial centers outside Lagos in the short run, but eventually, consumer demands will push adoption into the hinterland so I will not be surprised to see PoS terminals in the rural areas in the next 12-24 months,” he added.
Agada Apochi, managing director, Unified Payments, advocated the use of value added tax to encourage the use of electronic channels for payments.
According to him, government can also do a lot by creating the right incentives for adoption of e-payments.
He said that if government offers tax incentives for e-payments, it will be an effective tool to encourage a cashless culture.
That does not mean lower tax collection by government. Rather, government tax collection will increase.
For instance, if government were to offer 50% incentive on Value Added Tax for payments made electronically, government tax collection could increase by several multiples. 2.5% VAT on N100 million transactions is higher than 5% VAT on transactions of N10 million.
Currently, many transactions are not tracked because of cash payments and that is to the disadvantage of government.
Mrs. Regha Onajite, chief executive officer, Electronic Payment Providers Association of Nigeria (EPPAN) said: “the motivation for adoption for consumers is the convenience and security, since there is no compulsion to adopt by the way of penalty for at least the next few months. But, hopefully as people begin to align themselves with the benefits of electronic payment we should gradually see a hundred percent increase in the next one year,” she added.