POS transactions fall by N226 billion in Q1 2024 as cash outside banks climbs

Point-of-Sale (POS) transaction values have seen a downturn in Nigeria for the first quarter of 2024, marking a N225.73 billion drop when compared to the corresponding quarter of the previous year.

This sharp decline marks a 7.94% fall in the use of POS systems for transactions across the country as the currency outside banks surged.

The contrasting trends of POS transaction values and volumes—sourced from the Nigeria Inter-Bank Settlement System with the data of the Central Bank of Nigeria on currency circulation show a complex picture of the financial habits of Nigerians in the first quarter of 2024.

While this analysis covers the first quarter of 2024, the CBN has not yet released the data for March 2024. This limits the analysis for cash outside banks to February 2024.

The quarter started with a little rise in POS transaction values, which stood at N850.09 billion in January 2024, surpassing January 2023’s figures.

However, the initial growth could not last for long, 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, failing to match the N2.84 trillion recorded in the same period in 2023.

In February 2024, the volume of POS transactions decreased to 97.57 million from the 113.53 million recorded in the same month of the previous year. March continued this decline, with volumes falling to 103.65 million, down from the high of 177.93 million seen in March 2023.

When totalled, the first quarter of 2024 saw POS transaction volumes reach 314 million, which is a significant drop of 73.81 million, or 19.03%, from the 387.81 million transactions recorded in the first quarter of 2023.

This decline in POS transaction values and volumes can be seen in the context of the cash scarcity that hit Nigeria in the first quarter of 2023.

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.

BEB