Nigeria, too, has witnessed a sizeable increase in the volume of e-payments in recent years.
Countries the world over are witnessing a rapid evolution of payment systems. These changes follow the technological shift from traditional modes of payment such as cash, cheques, and cards to the digital frontier of virtual currency and mobile platforms. According to Capgemini and BNP Paribas World Payments Report, global non-cash transactions broke a decade-long record for growth in 2014-2015, with growth volumes in excess of 11%, to reach more than 433 billion transactions. Two regions fueled this increase: emerging Asia with a growth rate of 43.4% and CEMEA (Central Europe, Middle East, and Africa) with 16.4% growth. Nowhere has the growth of e-payment been more evident than in Africa.
The swell of different means of electronic payments (e-payment) and mobile payments continues to have a direct impact on local economies in Africa. Whilst Kenya remains the continent leader in this regard, thanks to the emergence of the likes of M-Pesa, Nigeria has also witnessed a sizeable increase in the volume of e-payments in recent years. However, without significantly increasing the rate of financial inclusion in the country through innovative methods, some of which are discussed below, Nigeria runs the risk of never fully actualizing the expansive potential of e-payments on her economy.
Electronic or “E”-payments have significant economic benefits for individuals and businesses alike. Electronic payment lowers costs for businesses, as the more payments they can process electronically, the less they spend on paper and postage. The convenience of e-payments can also help businesses improve customer retention, in comparison with those offering only traditional means of payments. The direct impacts of e-payments on a country’s GDP are well known and documented. In 2016, a report by Moody’s Analytics on “The Impact of Electronic Payments on Economic Growth” stated that the explosion of e-payments resulted in an added US$460 million to Nigeria’s GDP from 2011 to 2015. According to Christine Lagarde, Managing Director of the International Monetary Fund (IMF), Nigeria could save as much as US$9 billion - N3.24 trillion by shifting government payments alone from cash to digital systems. She was further quoted as saying that such a shift creates the potential to help reduce corruption, increase revenues, and generate investments in health and education.
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