NIGERIA in 2022 unlocked $3.2 billion as additional economic output through the development and utilisation of electronic payments, particularly real-time payment services.

This was made known at the weekend by the Chief Finance Officer (CFO), Parthian Partners, Mr Oluyinka Arewa, at the 2023 annual conference of the Finance Correspondents Association of Nigeria (FICAN).

This is just as the Nigeria Communications Commission (NCC) said that strengthening digital infrastructure for efficient and innovative payment systems in Nigeria requires a multi-faceted approach involving various stakeholders.

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According to Arewa, electronic payments continue to attract substantial global investments and have exhibited the highest returns and growth within the sector over the past decade.

As one of Africa’s largest economies, Arewa observed that Nigeria is well-positioned to harness the potential within the sector.

Indeed, Nigeria has witnessed a remarkable digital transformation with over 100 million active mobile phone users as of 2023.

This statistics signals the advent of a fully digitised financial services sector. However, he noted that despite these advancements, Nigeria’s payment system predominantly relies on cash. Recent events, such as the implementation of the cashless policy following the naira redesign late last year/early this year, highlighted the challenges associated with the country’s transition to a cashless economy.

“We understand that these challenges may appear formidable, but we are gathered here today because we believe these challenges are not insurmountable.

“One of the significant challenges facing electronic payments in Nigeria is the inadequacy of infrastructure, including operational and telecommunications facilities, as well as reliable electricity supply. Many e-payment systems depend on stable power sources and robust IT infrastructure, such as laptops, mobile phones, POS terminals and dependable internet connectivity,” Arewa said.

During the period of cash scarcity earlier this year, banks faced unprecedented e-payment failures, prompting the urgent need for technological infrastructure upgrades. The failure of e-payment channels on such a scale compelled customers to wait for banks’ networks to stabilise before completing their transactions.

Furthermore, Arewa added that fintech companies, initially considered a lifeline, also encountered challenges due to increased pressure. The issue of failed transactions has persistently affected numerous businesses reliant on electronic payment systems, he stated.


Also speaking, the Deputy Director, Technical Standards and Network Integrity, NCC, Mr Anthony Ikemefuna, said strengthening digital infrastructure for efficient and innovative payment systems in Nigeria requires a multi-faceted approach involving various stakeholders, including government agencies, regulatory bodies, financial institutions, technology providers and the private sector.

He listed key strategies and the way forward for achieving this goal to include, “Expand and upgrade broadband and mobile network infrastructure, particularly in underserved and rural areas; invest in data centers and reliable power supply to ensure the resilience and availability of digital payment systems.

“Launch nationwide digital literacy campaigns to educate citizens, especially those in rural areas, about digital payment systems; encourage the adoption of mobile banking and agency banking to reach unbanked and under-banked populations; update and streamline regulatory frameworks to accommodate digital payment innovations while ensuring consumer protection, security and financial stability.

“Collaborate with industry stakeholders to establish clear standards and interoperability requirements; develop and enforce robust cybersecurity regulations to protect digital payment systems from cyber threats and promote the adoption of encryption, multi-factor authentication, and fraud detection technologies, among others.”

Ikemefuna further called for the promotion of a competitive environment by preventing monopolistic practices and ensuring fair market access for new players; encourage fintech innovation through regulatory sandboxes and support for startups; implementing robust consumer protection mechanisms, including dispute resolution processes and complaint handling as well as raising awareness about the security and benefits of digital payments through public campaigns.




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