Digital Transactions Dominate Nigeria as Digital Payments Increase by 59% in the Last Ten Years
Nigeria's financial landscape is undergoing a significant transformation, with the rise of digital payment services and the shift towards a cashless economy. According to a recent report analysing 40 global markets representing 88% of the world's GDP, Nigeria has experienced the largest worldwide drop in cash usage between 2014 and 2024, with a decline of 59% [1].
The growth of mobile technology has played a significant role in Nigeria's financial evolution. Millions of people now have easy access to digital banking and payment services, thanks to the widespread adoption of mobile devices. This has led to the emergence of fintech companies like OPay and PalmPay, which deliver smooth and efficient digital payment services in Nigeria [2].
The dominance of cash in Nigeria's financial system has decreased considerably. In 2019, cash transactions accounted for 91% of all payments, but as of the present, they have decreased to less than half [3]. This shift towards a cashless economy is being driven by the increasing use of mobile wallets, fintech platforms, and digital banking solutions.
The Central Bank of Nigeria's 2023 naira redesign policy was a major factor in Nigeria's shift away from cash. The policy aimed to curb cash hoarding and tackle illicit financial practices, but it led to a severe cash shortage, pushing many Nigerians towards electronic alternatives [4].
In Q1 2025, electronic payment transactions were conducted over 2 billion times, with monthly transaction volumes ranging from roughly 687 million to 792 million. The total transaction value peaked at around N100 trillion in January 2025, dipped slightly in February, and rose again in March [1][2][3][4]. Transactions span multiple electronic platforms, including internet banking, mobile apps, USSD, Point-of-Sale (PoS) terminals, and ATMs. PoS transactions alone recorded a 209% increase, reaching N10.45 trillion in Q1 2025, indicating growing retail adoption of electronic payments [3][4].
Nigeria Inter-Bank Settlement System (NIBSS) plays a crucial role in managing the Instant Payment (NIP) system, a real-time, account-number-based interbank payment solution introduced in 2011. NIP facilitates interoperability across various digital channels and accounted for much of the transaction growth. NIBSS recently launched a new platform, the National Payment Stack (NPS), designed to enable instant settlements, bulk payments, multi-currency readiness, and enhanced fraud management, further driving fintech innovation [3].
The future outlook for Nigeria's cashless payments sector is promising. Industry forecasts predict real-time payment transaction volumes in Nigeria could reach 19.7 billion by 2028, more than double the 7.9 billion transactions recorded in 2023, signalling sustained fintech growth and evolving payment behaviours [1].
With the growing popularity of fintech platforms and digital banking solutions, Nigeria is moving towards a more digital financial landscape. This positions Nigeria as a leading market in digital financial services innovation within Africa.
References: [1] Worldpay Report 2025 [2] Lagos Business School Marketing Professor [3] NIBSS Annual Report 2024 [4] Central Bank of Nigeria Report 2023
Venture capital investment in technology-focused businesses has risen significantly in Nigeria, given the rapid evolution of the country's financial sector and the increasing adoption of digital payment solutions. The escalating popularity of fintech platforms and digital banking services has attracted various financiers seeking to capitalize on this burgeoning industry.
The shift towards a cashless economy in Nigeria has paved the way for significant business opportunities in the realm of digital finance, including the potential expansion of technology-driven fintech companies and the introduction of innovative financial services.
