MIAMI & LAGOS, Nigeria–(BUSINESS WIRE)–Nigeria’s real-time and digital payments revolution is driving economic growth and financial inclusion at an unprecedented rate in Africa’s largest economy, according to the third edition of Big Time Real Time, published by ACI Worldwide, (NASDAQ: ACIW), in partnership with GlobalData, a leading data and analytics company, and the Center for Economics and Business Research (Cebr). This report – tracking the growth of real-time payments in 53 countries – includes financial research for the first time, and provides a comprehensive view of the benefits of real-time finance for consumers, businesses, and the general economy in 30 countries.
The report identifies Nigeria as Africa’s real-time and digital leader. The country recorded 3.7 billion real-time transactions in 2021, ranking sixth in the global real-time payment market competition behind India, China, Thailand, Brazil, and South Korea. The spread of new digital services and real-time payments helped Nigeria unlock US$3.2 billion in additional revenue in 2021, representing 0.67 percent of the country’s GDP.
Real transactions are expected to rise to 8.8 billion per year by 2026, a 5-year CAGR of 18.6 percent. This will help unlock US$ 6 billion of additional GDP in 2026, which represents 1.01 percent of the country’s GDP, meaning that Nigeria will rank 4th.Th a place among the world’s economies realizing the great financial benefits of real-time payments.
“Nigeria is growing fast in Africa to transform the world’s economy,” said Santhosh Rao, Director of the Middle East, Africa, and South Asia, ACI Worldwide. “In the wake of the COVID-19 pandemic, Nigerians have come to expect greater speed, simplicity, and modern thinking from financial providers. Although cash is still widely used, the transition to digital and real-time payment services is a testament to the success of the government in promoting rapid growth in digital access, especially payments.”
The rapid growth has also been boosted by the participants in the payment industry in the country. One of these players, Interswitch Group, a leading payment technology company, has been running the payment industry in Nigeria for 20 years.
In recent years, Interswitch has partnered with ACI to implement cutting-edge technologies that are changing the payment landscape in Nigeria. These innovations include single-issue platforms for all payment types, digital payment acceptance for consumers, enterprise payment platforms, and secure omni-channel payment platforms, among others.
“As more and more Nigerians are using virtual and digital currency, we have seen a significant increase in the demand for infrastructure to enable this,” said Jonah Adams, Managing Director, Digital Infrastructure and Managed Services, Interswitch Systegra. “Interswitch and ACI are committed to driving digital transformation across Africa by delivering the right tools, innovations and solutions that enable business efficiency and drive customer growth and profitability.”
“Our research shows that governments that promote real-time flexibility in their national payrolls benefit all stakeholders,” added Rao. “Consumers and businesses benefit from fast, frictionless and highly connected payment services, financial institutions secure their business in a highly competitive environment by accelerating modernization and data adoption, and national governments support economic growth, reduce growth in their economies and create a better system economy for all.”
Nigeria’s real-time payment system – NIBSS Instant Payments (NIP) – was launched in July 2011. The system is supported by all commercial banks, small banks and mobile money users, and can be used through several methods, including the Internet. and mobile banking, bank branches, kiosks, mobile USD, POS terminals and ATMs. Any availability has helped NIP to achieve today’s high adoption and usage.
There is currently an ongoing initiative within Nigeria to expand this framework for cross-border transactions – the next step is to reduce and reduce the cost of international business, and eliminate surprises related to exchange rates when returning home or repaying loans. And countries across the continent are committed to take Nigeria’s success as the rest of Africa is still an untapped continent.
“Africa is well-positioned to benefit from the lessons learned from other countries and continents and to maximize the results and benefits that real-time payments provide,” concluded Rao. use virtual payments to build the continent’s future digital economy. Banks need to look at the market if they are entering a new area of high potential and assess whether the technology they are currently using is appropriate. Banks that want to succeed and compete in the future need to start a digital transformation process, which allows them to both connect to new schemes easily and innovate quickly using real-time rails. ”
Some key findings of the report:
In 2021, 55% of the value of payments in Nigeria was in real time, 37.7% through other electronic payment methods, and 9.3% in cash – the value of real transactions as the number of transactions should rise. to 64.4% in 2026 (when the cost of electricity and money should decrease, to 30.7% and 4.9% respectively)
64.7% of Nigerian consumers own a mobile wallet
The impact of the proposed full payment system in Nigeria could add 4.4% of the real GDP by 2026. This is not to say that there is no room for non-instant electronic or paper payments.
Real payments have contributed significantly to the establishment of the shadow economy in Nigeria – the growth of the shadow economy is expected to be 47% of the permanent GDP in 2021, equivalent to about USD 228 billion – without real payments, Nigeria’ shadow economy would have been larger by 1.4%.
On the other hand, payment fraud is increasing; 1 in 4 consumers in Nigeria (25.2%) experienced fraud in 2021, while 27% experienced fraud, and 14.3% had their card information stolen.
Modern banking: Banks are increasingly turning to the cloud to support their digital transformation – 80% of banks in Nigeria are planning to transition to a cloud-based management platform, while 70% are actively looking at a Software-as-a-Service (SaaS) model
About ACI Worldwide
ACI Worldwide is a global leader in real-time payment services. Our proven, secure and scalable software solutions enable leading organizations, fintechs, financial disruptors and merchants to process and manage electronic payments, pay for all transactions, process payments, and manage fraud and risk. We combine global experience with local presence to support the digital transformation of payments and commerce.
Interswitch is a leading technology driven company focused on payment processing in Nigeria and other African countries.
Founded in 2002, Interswitch disrupted the traditional payment system in Nigeria by facilitating the introduction of electronic payments and switching services. Today, Interswitch is a leading player with a major impact on the economic development of Nigeria and is active in all payments, providing omni-channel payment solutions.
Interswitch’s vision is for a prosperous Africa, driven by sustainable exchange of value and trade and aims to create technological solutions that connect and empower people, businesses, and communities. Interswitch’s extensive network and robust payment platform has contributed to the growth of the payment system in Nigeria and given Interswitch the means to expand in Africa.
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