Nigeria’s digital payments industry is witnessing an unprecedented surge, with e-payment transactions reaching NGN1.56 quadrillion in the first half of 2024 representing over 70% of the total volume recorded in 2023. This explosive growth, detailed in the newly released Nigeria Payment Report 2025 by Zone and TechCabal Insights, highlighting the country’s leading role in Africa’s shift toward cashless economies.
At the heart of this transformation is a vibrant fintech ecosystem that is reshaping how money is moved, accessed, and regulated. Fintech platforms like Flutterwave, Paystack, and OPay are providing Nigerians with seamless digital financial services, even as traditional banks expand their digital offerings. These innovations are being catalyzed by supportive policies from the Central Bank of Nigeria (CBN), whose Payment System Vision (PSV) 2025 has laid the foundation for interoperability, open banking, and improved Know-Your-Customer (KYC) regulations.
According to the report, Nigeria hosts 217 fintech startups more than any other African nation. With investments topping USD 140 million in just the first half of 2024, Nigerian fintechs outpaced competitors in Kenya, Egypt, and South Africa.
Driving this transformation is the increasing penetration of internet banking, mobile apps, USSD services, and Point-of-Sale (POS) systems. Web transfers alone accounted for NGN828.05 trillion in transaction value in the first half of 2024, making it the most popular channel by value and volume.
The e-payments data from the Central Bank of Nigeria (CBN) provides a clear guide as it shows the platforms supporting rapid changes within the e-payments ecosystem. The channels of the e-payment data include cheques, ATM, POS, internet (web) transfers, NEFT, RTGS, USSD, mobile app transfers, direct debits, and MMOs.
Although the Real-Time Gross Settlement (RTG) Transfers channel recorded the lowest transaction volume, the USSD channel processed the least value in e-payments, with NGN 2.188 trillion in transactions by mid-2024.
Industry rift between telecommunications companies and banks undoubtedly contributed to the declining usage of USSD among the users of e-payment channels, as the latter owes the former over NGN 200 billion for providing USSD services to banks in Nigeria with plans to disconnect 18 out of the 22 banks from the USSD service.
In contrast, internet web transfers were the most widely used, in volume and value, totalling NGN828.05 trillion in transactions during the same period.
A major contributor to the fintech boom has been Nigeria’s implementation of open banking regulations. The framework, which mandates secure data sharing between financial institutions, has enabled the creation of customized digital products and improved financial transparency.
Neobanks like Kuda and Moniepoint have also embraced advanced AI and machine learning tools to offer real-time fraud detection, transaction insights, and personalized lending services. Sparkle, for instance, uses AI to automate reconciliation and customer support, streamlining services once limited to high-net-worth individuals.
While digital payments in Nigeria are booming, they are not without challenges. The CBN’s push for stricter KYC requirements mandating BVN or NIN for account openings has improved regulatory compliance but increased onboarding costs. Compliance can cost fintechs up to NGN2,000 per customer.
At the same time, fraud incidents are rising sharply. The report highlights that digital fraud in Nigeria jumped by 468% between 2023 and the first nine months of 2024, reaching NGN53.4 billion. High-profile breaches have also hit payment giants like Flutterwave and Interswitch, prompting a renewed focus on cybersecurity.
Nigeria’s influence extends beyond its borders. With remittances exceeding USD 20 billion annually, fintech startups like LemFi and Rise are expanding their cross-border services to connect the Nigerian diaspora with home-grown financial services. The introduction of diaspora-focused accounts such as NRNOA and NRNIA signals the country’s intent to formalize international money flows.
Globally, Nigeria’s payment system is being benchmarked alongside India’s UPI and Brazil’s Pix. Though not yet matching their volumes, Nigeria’s NIBSS Instant Payment (NIP) system processed NGN1.08 quadrillion in 2024 up nearly 80% from the previous year.
The nation’s financial inclusion rate has reached 76%, fueled by mobile money adoption, digital wallets, and growing agent networks. However, the report acknowledges persistent hurdles like unreliable internet, limited infrastructure in rural areas, and a trust deficit among older consumers.
Despite these, optimism remains high. The digital economy is already contributing to tax revenue, with CIT and VAT collections up by 71.2% and 100.7%, respectively, in H1 2024. Projections suggest Nigeria’s fintech market could reach USD 154.5 billion by 2029, growing at a CAGR of 22.62%.
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