By Chinwendu Obienyi
Despite recording an initial rise in January, the volume of Point-of-Sale (PoS) transactions in Nigeria (February and March) culminated to a 19.03 per cent drop for the first quarter (Q1) of 2024, data sourced from the Nigeria Inter-Bank Settlement System (NIBSS) and the Central Bank of Nigeria (CBN) revealed on Tuesday.
The month of January 2024 saw an initial rise in transaction volumes to 112.78 million, an increase from 96.35 million in January 2023. However, the volume of PoS transactions decreased to 97.57 million from the 113.53 million recorded in February 2023.
The figure decreased further in the month of March as the volume fell to 103.65 million, down from the high of 177.93 million seen in March 2023. Hence, when totaled, the first quarter of 2024 saw PoS transaction volumes reach 314 million.
This represents a significant drop of 73.81 million, or 19.03 per cent, from the 387.81 million transactions recorded in the first quarter of 2023.
Furthermore, the data revealed that the value of PoS transactions witnessed a downturn in the reported period, registering a N225.73 billion drop when compared to the corresponding quarter of the previous year.
The quarter opened with a slight uptick in PoS transaction values, which stood at N850.09 billion in January 2024, surpassing January 2023’s figures. However, the initial growth was short-lived, as February 2024 saw a reduction in transaction values to N805.05 billion, down from N883.45 billion in February of the previous year.
The downward trajectory extended to March 2024, where the value of transactions through POS systems further decreased to N961.86 billion from March 2023’s high of N1.15 trillion.
The total value of transactions for Q1 2024 summed up to N2.62 trillion, fails to match the N2.84 trillion recorded in the same period in 2023.
According to financial analysts, the decline in POS transaction values and volumes can be seen in the context of the cash scarcity which hit Nigeria in the first quarter of 2023.
They noted that the cash shortage during that period led to a surge in cashless transactions, including the use of POS systems, as citizens sought alternatives to conduct their daily business in the absence of sufficient cash circulation.
“The recent decline in POS usage suggests a reversal of the cashless trend, possibly indicating that the aftereffects of the previous year’s cash scarcity might be normalizing, or that new patterns in consumer transaction behaviour are emerging”, they said.