Nigeria has achieved the largest global reduction in cash usage, as digital payments have surged significantly over the past decade. A recent report by global payment processing company Worldpay highlighted a 59% decrease in cash transactions in Nigeria from 2014 to 2024. This remarkable transition places Nigeria ahead of six other major cash-reliant economies, including the Philippines and Indonesia.
The sharp decline in cash usage coincides with a record increase in electronic transactions, driven by growing collaborations between banks and fintech firms aiming to promote digital payment solutions. The Central Bank of Nigeria’s naira redesign policy in 2023 also played a crucial role, aiming to mitigate cash hoarding and money laundering, albeit causing temporary cash shortages.
Fintech companies such as OPay and PalmPay capitalized on these changes by providing reliable digital alternatives for money transfers and bill payments, particularly during times of cash scarcity. Consequently, electronic transactions markedly increased, with the Nigeria Inter-Bank Settlement System (NIBSS) recording over a 16-fold surge in transaction volume from 2018 to 2024.
Mobile devices are pivotal in this transformation, contributing to the drastic reduction in Nigeria’s reliance on cash from 91% in 2019. Financial inclusion has also seen a significant boost, with the rate rising to 64% in 2023 from 56% in 2020, and projections suggesting further growth.
As cash usage continues to decline, projected to reach 32% by 2030, Nigeria is on track to solidify its standing as a leader in digital finance and financial inclusion in Africa, setting an example for potential future shifts in monetary practices across the continent.
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