The value of transactions over Point of Sales terminals in Nigeria surged to N18 trillion in 2024, hitting an all-time yearly record.
This is according to data obtained from the Nigeria Inter-Bank Settlement System.
Fuelled by a protracted scarcity of cash at ATMs and the aggressive push in PoS deployments by fintech companies, the 2024 record represents a 69% increase when compared with the value of PoS transactions in 2023 at N10.7 trillion.
In the same vein, the volume of transactions rose by 8% year-on-year to N1.5 billion in 2024 compared with the N1.4 billion recorded in the previous year.
While commercial banks had been the major drivers of PoS terminal availability in the past, the entrance of fintechs into this space has seen the number of PoS devices in the market grow astronomically.
In 2024, NIBSS data shows that the number of PoS terminals deployed across the country more than doubled to 5.5 million from 2.4 million recorded at the end of 2023.
This represents a 129% increase.
Meanwhile, registered PoS terminals in the country also jumped from 3.5 million in December 2023 to 7.8 million in December 2024, indicating that about 4.3 million new PoS machines were registered last year.
The gap between deployed terminals and the number of registered terminals indicates that there are still over 2 million devices that are already registered but yet to be deployed.
Industry analysts believe there are several factors contributing to the increasing adoption of POS as a means of transaction by Nigerians.
Chief among these is the difficulty in accessing cash through the usual banking channels.
Long queues and wait times, along with intermittent unavailability of cash in the ATM machines have frustrated patrons, leading to POS payments becoming increasingly attractive.
“The rapid growth of POS is not just an avenue for payment but also withdrawals have filled a gap for many Nigerians who struggle to access cash through banking channels such as ATM or teller withdrawals.
“It has also helped in bringing the banking services closer to the rural areas, which do not have as many banks accessible to them,” said A Lagos-based financial analyst, Adewale Adeoye.
While the initial motivation for PoS business was the lack of bank ATMs in some areas, this has shifted to the lack of cash in ATMs and the need to make cash available to Nigerians.
It is now a common place to see PoS agents directly opposite a bank ATM or beside it as an alternative for bank customers whenever the ATMs refuse to dispense cash.
For a fintech like PalmPay, the deployment of PoS through agents was part of the company’s strategic plans to drive financial inclusion in Nigeria.
“This mission has fueled our efforts in deploying more PoS terminals across the 774 local government areas in the country,” the Head of Marketing and Communications at PalmPay, Femi Hanson, said.
According to him, the fintech has onboarded over 700,000 agents and it keeps making investments in deploying more PoS terminals into all regions in the country.
Another fintech, Moniepoint, also recently disclosed that it has deployed over 800,000 PoS across the country and is now planning to introduce a new innovation with an all-in-one PoS machine that combines payment processing, inventory management, and transaction reconciliation.
The latest data released by OPay also shows that the company has over 500,000 PoS agents spread across the country.
Highlighting the impacts of PoS business on the country, Hanson noted that aside from driving financial inclusion, the growing transactions on the platform are also boosting revenue for the government through the Electonic Money Transfer Levy being charged on transactions from N10,000 and above.
“We have numerous stories of individuals and families that have benefited from the PoS business through the income made from charges on transactions.
“In addition, PoS operators are providing convenience for Nigerians. We saw this during the 2023 cash crunch and even till the present time. More people rely on PoS agents to get cash or even carry out basic transactions,” he said.
Despite their strategic role in the payment ecosystem, many Nigerians are concerned about charges being imposed by PoS operators across the country.
This has become more worrisome with the perennial non-availability of cash in bank ATMs leaving many Nigerians who need cash at the mercy of PoS operators.
In some parts of Lagos, a typical PoS transaction now attracts fees as high as N500 for a withdrawal of N5,000—a sharp contrast to the N100 or N200 that was the norm a few months ago.
For larger amounts, the charges are even steeper, leaving customers with no choice but to pay the inflated rates.
But the operators have also argued that the high charges are also a reflection of the cost of getting cash as they are also unable to withdraw cash from banks for the business, but have to source it through other means, which include buying from petrol stations.
It was earlier reported that electronic payment transactions in Nigeria rose to N1.07 quadrillion in 2024, reaching an all-time high and the first time to hit the quadrillion mark.
According to the data released by the NIBSS, the value recorded on the NIBSS Instant Payment represents a 79.6% increase over the N600 trillion recorded in 2023.
The NIBSS Instant Payments is an account-number-based, online real-time Inter-Bank payment solution developed in the year 2011 by NIBSS.
It is the Nigerian financial industry’s preferred funds transfer platform that guarantees instant value to the beneficiary.
According to NIBSS, over the years, Nigerian banks have exposed the NIP to their customers through their various channels, that is, internet banking, bank branches, Kiosks, mobile apps, Unstructured Supplementary Service Data (USSD), PoS, and ATMs.
