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Less access points frustrating ATM, POS usage—Experts

Experts in financial inclusion and digital transactions have revealed the reasons behind dwindling usage of payment platforms like Point of Sale (POS) and Automated Teller Machines (ATM) nationwide.

Explaining the key reasons causing the hiccups, C-Founder of Lidya Group, Ercin Eksin noted that infrastructure remains a major challenge in achieving a widespread usage of payment channels in the country.

He decried that in situations where merchants have up to four or five PoS terminals but only one or two is working, there are chances that customers are bound to mostly use cash in payment. Eksin added that the experience is also impacting financial inclusion in the country as the payment access points are not enough to drive it particularly in the suburbs and rural areas.

Besides, the chairman of the Board of Enhancing Financial Innovation and Access (EFInA), Modupe Ladipo, averred that the need to address the lack of access points is as important as cutting down the costs of these access points to the customers particularly in the rural areas.

Figures from the Nigeria Inter Bank Settlement Systems (NIBSS) which holds the payment data in the financial industry, show that access points still remain a challenge as the country still has only 17,712 ATMs around the country serving the 30.457 million bank customers that have BVN.

This means that close to 200 customers are being serviced by an ATM and this number goes higher at the suburbs and rural areas where fewer ATMs are deployed.

According to the managing director and chief executive of NIBSS, Mr. Ade Shonubi even though the use of POS have risen by almost 400 per cent in the last three years, the payment channel is yet to gain popularity in the country as only 12 per cent of bank customers make use of the terminals.

The analogy suggests therefore that of the 30 million unique bank customers holding over 80 million bank accounts and 60 million payment cards, only about 3.5 million of them use their cards on PoS machines.

In August this year, the volume of transaction done via PoS terminals rose to 13.27 million from 5.37 million in the comparable period of last year and 32.73 million in 2015.

Value of transactions don via the 141,531 PoS machines that have been deployed as at August this year likewise rose to N124.44 billion from N64.106 billion last year august and N35.83 billion in 2015.

While noting that the increase in volume and value of transactions in the alternative payment channel is a feat that ought to be applauded, Shonubi argued that looking at the figures in transactions, only 3.5 million people use PoS out of the 30 million bank customers and over 60 million cards that have been issued.

According to him, “We are not asking the right question which is why are people not using the channels that are there and these are educated people.” He noted that there are too many assumptions around what the issues are and therefore “we put a lot of efforts into things that at the end of the day do not generate the results that we expect.”

All the experts who spoke to our correspondent on the waning usage of digital payment platforms called on the government and Central Bank of Nigeria (CBN) to work on initiatives that build infrastructure and drive usage.