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The Central Bank of Nigeria’s data between January and June 2024 paints a striking picture of digital payment growth. Over 252.06 million transactions, totaling N2.19 trillion, were made via USSD codes. This trend underscores the rapid expansion of mobile payment systems in Nigeria, where digital finance continues to evolve.
The figures for the first half of 2024 highlight a significant increase in USSD-based transactions, especially when contrasted with the N4.84 trillion processed through 630.6 million transactions throughout the entirety of 2023. This rapid growth in mobile payment usage signals a clear shift towards digital financial solutions in Nigeria.
The N2.19 trillion recorded in the first half of 2024 represents a remarkable 45.3% of the total transaction value from 2023, while accounting for 40% of the transaction volume. This demonstrates a clear upward trajectory for mobile financial transactions in Nigeria, positioning them as an integral part of the economy.
USSD, originally created by telecom firms to handle tasks like airtime recharges and subscription services, has become a cornerstone of mobile banking. Its widespread adoption can be credited to its capacity to function without an internet connection, providing an essential service to many Nigerians, especially in regions with inconsistent or no internet access.
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This is especially important in rural areas, where internet connectivity remains unreliable.
However, this form of transaction has been threatened by over N250bn debt, which has been a contentious issue for the past six years, prompting past interventions from the Central Bank of Nigeria under Godwin Emefiele’s leadership and the former Minister of Communications, Isa Pantami, but no lasting solution has been reached.
The Chairman of the Association of Licensed Telecommunications Operators of Nigeria, Gbenga Adebayo, earlier lamented that banks have been profiting from USSD services without fulfilling their payment obligations in the last six years.
Last month, it was reported that telecom operators in Nigeria were seeing some progress in the repayment of the N250bn debt tied to Unstructured Supplementary Service Data services, with smaller banks beginning to settle their obligations.
However, tier-one lenders responsible for the bulk of the debt are yet to make significant payments.
At the time, the ALTON chairman disclosed that while some repayments have been recorded, they fall short of expectations.
While USSD remains a dominant channel amidst existing challenges, other electronic payment methods have also seen substantial growth.
Automated Teller Machine transactions have experienced a remarkable volume, with N12.21tn transacted in the first half of 2024 for 496.44 million transactions. Point-of-sale transactions are also significant, indicating the country’s ongoing shift towards cashless payments.
