In Nigeria, cards are used for most online retail payments. As of January 2021, this payment method accounted for 35 percent of the total online transactions used in the country. On the other hand, the use of cash and bank transfers covered 23 percent and 21 percent of the payments, respectively. In fact, a popular way to pay on online marketplaces in Nigeria is cash on delivery. Data on credit card penetration in Nigeria show that the share of people owning a credit card is quite low. This means that, generally, residents resort to other payment methods to meet their online transaction needs.
Increasing use of checks
The use of checks has risen in Nigeria in recent years. Between January and August 2020, over 11.6 million check payments were issued in the country. These were in the value of 9.1 trillion Nigerian naira (NGN), roughly 21.9 billion U.S. dollars. On the whole, trillions of NGN in checks are issued each month. For instance, in December 2020 alone, Nigeria distributed around 1.6 trillion NGN worth of checks – corresponding to 3.8 billion U.S. dollars. To ensure safety and ease when dealing with checks, the country commenced the use of new standardized checks in April 2021.
Mobile money on the rise
Mobile money, also known as MoMo, has become a widely used method of payment not only in Nigeria, but also in the whole of Africa. In West Africa alone, there were close to 200 million registered mobile money accounts as of 2020. In Nigeria, customer subscriptions to this product reached around 15 million in 2019, which led to over 377 million mobile money transactions that year. Most mobile money operators have agents located in strategic places in the country, ensuring the delivery of quick services to customers. As of 2019, there were more than 266 thousand mobile money agents in Nigeria.
Distribution of online payment methods in Nigeria as of January 2021
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PPRO. (May 19, 2021). Distribution of online payment methods in Nigeria as of January 2021 [Graph]. In Statista. Retrieved November 27, 2022, from https://www.statista.com/statistics/1172940/distribution-of-online-payment-methods-in-nigeria/
PPRO. "Distribution of online payment methods in Nigeria as of January 2021." Chart. May 19, 2021. Statista. Accessed November 27, 2022. https://www.statista.com/statistics/1172940/distribution-of-online-payment-methods-in-nigeria/
PPRO. (2021). Distribution of online payment methods in Nigeria as of January 2021. Statista. Statista Inc.. Accessed: November 27, 2022. https://www.statista.com/statistics/1172940/distribution-of-online-payment-methods-in-nigeria/
PPRO. "Distribution of Online Payment Methods in Nigeria as of January 2021." Statista, Statista Inc., 19 May 2021, https://www.statista.com/statistics/1172940/distribution-of-online-payment-methods-in-nigeria/
PPRO, Distribution of online payment methods in Nigeria as of January 2021 Statista, https://www.statista.com/statistics/1172940/distribution-of-online-payment-methods-in-nigeria/ (last visited November 27, 2022)