The Nigerian payment industry recently got global recognition as one of the fastest growing and advanced in Real-Time Payments (RTPs) in the world. This followed its 6th ranking position among 10 countries in RTP transactions for 2020, covered by the global survey report. This is the fruit of years of committed efforts by the Central Bank of Nigeria (CBN) to build a robust payment system, as well as achieve 80 per cent financial inclusion during the year under review.
Real-Time Payments are platforms through which money is transferred from one network to another. Its effectiveness is determined by how fast and seamless such payment is made real-time, 24/7 online transaction, connected to personal account. It does not rely on prepared balance.
We rejoice with Nigeria on the great feat. Indeed, RTPs bring with it numerous advantages, among which include the instantaneous interactions in money transfer. Before now, while money transfer used to be slow and insecure, RTPs have improved the processes. The finteck and banking system have swiftly adopted the technology, thereby bringing new opportunities for innovation, growth and costumer experience in money transfers.
Having recorded 1.9 billion real-time transactions last year, Nigeria payment system can be said to be ready to play on the world stage of RTPs. However, Nigeria should improve on the 6th position it currently occupies in the global ranking transaction system. It still trailed behind India, which retained its position for two successive years, with 25.5 billion transactions, followed by China with 15.7billion deals, South Korea, third with 6.0billion deals, Thailand, 5.2 billion and United Kingdom, 2.8billion deals in 2020.
Other countries on the list are Japan in 7th position with 1.7billion deals, Brazil, and United States in 8th and 9th positions with 1.3billion and 1.2 billion deals, respectively, Mexico in the 10th place with 942 million transactions. The RTPs study also tracked and analysed the payment volumes, growth and dynamics across 48 global markets.
More than 70.3billion RTPs transactions were processed in 2020. This represents an increase of 41 per cent, compared to 50 billion recorded in 2019, as COVID-19 pandemic accelerated trends away from cash and cheques toward greater reliance on RTPs and digital payments.
Nigeria’s encouraging performance was part of the global e-transactions last year, which was 9.8 per cent, from 7.6 per cent in 2019 and the value of Real-Time payment deals, which was up by 32.8 per cent, rising from $92trillion.
According to available data, with millions of people globally having to change the way they work and live, and the way they shop and pay, mobile wallet adoptions have been on a steady rise from over 46 per cent in 2020, up from 40.6 per cent in 2019 and 18.9 per cent in 2018. These transactions amounted to 102.76 billion last year. It is expected to reach 2, 582.8 billion by 2025. It is, therefore, commendable that despite the COVID-19 pandemic, the Nigerian payment industry was able to achieve the laudable feat.
Despite the good news for Nigeria’s rising profile on RTPs platforms, the report has revealed that different forms of bank fraud still pose a serious challenge, as fraudsters have evolved new tricks to target new channels. For instance, insider abuse and identity theft, often perpetrated by banks’ staff, rose to 12.5 per cent and six per cent, respectively, in 2020, while hacking increased by 4.4 per cent.
These forms of fraud, using different platforms, have caused the Nigerian banking industry over N89billion between 2016 and 2019. According to the Financial Stability Report of the CBN, about N7.9billion was lost in six months alone in 2018, and a total of N12billion in 2017 due to fraud by banks’ staff. Let the CBN come up with measures to check rising fraud in the sector.
In all, we urge the CBN and the Bankers Committee to see the performance of Nigeria in the global RTPs as an endorsement to do more. We say so because the reward for hard work is more work. There is need to address factors that impede better processing of Real-Time transactions. With the global economy ever dynamic, the only way to keep pace with instantaneous interactions in money transfer is to build trust and confidence in our payment system and make it more secure, while using new technology that will bring new opportunities for innovation and growth in the money transfer rail platforms. There is no doubt that the Nigerian payment industry will likely outperform its current 6th position in the next rating.