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Nigeria Cards & Payments Market Report
- Published Date: January 2023
NIGERIA CARDS AND PAYMENTS REPORT
A comprehensive overview of the cards, payments and consumer banking market in Nigeria, with clearsighted commentary backed by relevant data.
What is happening in the Nigerian cards and payments market?
Incumbent banks are facing unprecedented challenges as fintech picks up increasing investment and the authorities slowly but surely make ground in the battle to modernise and digitalise infrastructure. The consumer appetite is there: debit card purchase volume at the POS is set to double its 2021 figure by 2024, B2C e-commerce billed volume has doubled from 2019 to 2022 and transaction value on mobile P2P payments has increased almost tenfold since 2019. There are undoubtedly challenges in the form of civil disorder and corruption, but digital methods may prove the key to unlocking the historic opportunity presented by Africa's largest population – in a country where mobile phone ownership is now universal.
What can we expect in cards and digital payments here?
Mobile payments transactions are growing at one of the fastest rates in the region. The sector looks set to dominate the future of payments here. In 2021, a framework for QR code payments in the country was launched. The central bank wants to ensure interoperable systems. In terms of cards in circulation, Nigeria has one of the largest payment-cards markets in sub-Saharan Africa. The central bank, despite missteps, seems determined to move the eNaira (launched in late 2021) into the mainstream, and a new domestic card scheme is set to be launched in early 2023.
How are other players and challengers faring?
Customer adoption of fintech products is on the rise, and the space continues to attract investment. The pan-African mobile-payments market is generally seen as a huge commercial opportunity, leading investors to increasingly flock to ambitious players here. E-commerce is popular, but potential is largely untapped. The merchant acquiring market is set to open for non-banks, as the authorities look to facilitate competition. The eNaira, for example, could halve merchant service fees.
What about global players? What are they encountering in this cards and payments market?
Cash-on-delivery was the most common payment method chosen when shopping online in 2021, but a centralised settlement system for intra-African payments has launched, technically paving the way for economies of scale on the digital side. Global card networks are gaining share, although activity remains exceptionally low, especially for credit cards.
This is what you will learn from this report:
- How fintech has been boosted by back-end gains
- Why banks are focusing on mobile
- Which sector could treble in size
- How cards potential could be unleashed
The report explores the Nigerian payments system covering infrastructure payment preferences, consumer payment trends and the development of online payment systems. The report delivers insights into the debit and credit cards markets in Nigeria with analysis and commentary on market size, transaction and billed volumes, profit pool analysis, networks and issuers. The report discloses details of regulatory policy and developments in supervisory roles in the payment cards market for Nigeria. The report provides the necessary data and intelligence to assess the competitive dynamics and emerging market trends of Nigeria's cards and payments market.
Nigeria Payments Research | Report Contents
TABLE OF CONTENTS
Demographics and the economy
Payments environment
Cards market
Mobile payments
Profit pool
The networks
Key retail banks and issuers
Acquiring and processing
Online acquiring
Regulatory and other cards market information
Nigeria Country Report Data Tables
(All 2016-25F unless otherwise stated)
1: Demographic and economic indicators
2: Ownership of key consumer devices
3: Internet usage by population
4: Access points 2016-23E
5: Account penetration
6: Consumer payment 2016-23E
7: B2C e-commerce payment methods 2016-23E
8: Total cards payment metrics
9: Credit card numbers
10: Total credit cards metrics
11: Credit cards profitability indicators
12: Debit cards numbers
13: Debit cards metrics
14: Mobile proximity payment metrics: 2016-21
15: Mobile P2P payments: 2017-21
16: Nigeria market profit pool including credit card numbers, billed volumes, outstandings, interest incomes, net interest revenues, merchant revenues, card fee revenues, other non-interest incomes, total revenues, net credit losses, operating expenses, total expenses, pre-tax profits, merchant service charges, rollover rates, APR, net credit losses to outstandings, operating costs to revenues, ROA (pre-tax profits to outstandings).
(All below 2016-23F unless otherwise stated)
17: Networks' credit card market shares
18: Networks' credit card numbers
19: Networks' credit card billed volume
20: Networks' number of credit card transactions
21: Networks' average credit card transaction value
22: Credit card interchange fees by network
23: Networks' debit card market shares
24: Networks' debit card numbers
25: Networks' debit card billed volume
26: Networks' number of debit card transactions
27: Networks' average debit card transaction value
28: Debit card interchange fees by network
29: Key credit card issuers market shares by credit card numbers 2018-23F
30: Key issuers market shares in credit card outstandings 2018-23F
31: Key debit card issuers market shares by debit card numbers 2018-23F
32: Merchant acquirer credit card market share 2022E
33: Credit card merchant service charges
34: Merchant acquirer debit card market share: 2022E
35: Debit card merchant service charges
36: Credit card issuer/issuing processor relationships
37: Credit card acquirer/acquiring processor relationships
38: Credit card issuing processor market shares by card numbers 2022E
39: Credit card acquiring processor market shares by the number of POS transactions 2022E
40: Online merchant acquirer market share 2022E
Nigeria Country Report | Selected Extracts
Payments Environment
Cash continues to be the dominant payment mode here, with that preference encouraged by a large informal economy that represents more than half of GDP. The result is that around three-quarters of the value of transactions in Nigeria still rely on notes and coins.
Cards market
As with comparable developing markets in the region, debit cards dominate here, representing 99% of all issued payment cards. Nonetheless, their inactivity is extremely high with some 60% reported to be inactive.
Mobile Payments
There has been a considerable rise in mobile phone penetration in the country, which has widened the opportunities for banks and payment service providers to roll out mobile banking services and mobile payment solutions.
Profit Pool
The Nigerian credit card market is small, and products are exclusively targeting a small, highly affluent section of the population. There were just 726,000 active credit cards at the end of 2021, representing a penetration rate of 0.6 cards per 100 adults.
Card Networks
Most banks are licensed to issue Mastercard and/or Visa branded credit cards. Debit cards have a significantly stronger presence than credit cards in Nigeria, accounting for about 99% of payment card billed volume in 2021.
Key Retail Banks and Issuers
There were 32 retail banks offering banking services in Nigeria at the end of 2021. The country's five largest banks are known collectively as FUGAZ – standing for First Bank of Nigeria, United Bank for Africa, Guaranty Trust Holding Company (formerly GTB), Access Bank and Zenith Bank.
Acquiring and Processing
Acquiring here is dominated by large banks, with some 14 here providing
the service. UBA, Zenith and Access together account for an estimated 64% of credit-card acquired billed volume. The main processors operating in Nigeria are Interswitch and Unified Payments. Some elements of processing, however, are executed in-house by the issuers and acquirers themselves.
Online Acquiring
The e-commerce market in Nigeria has grown over the last five years; in 2021, the number of online buyers in the country reached about 80 million. However, nationwide e-commerce growth is hampered by issues such as poor infrastructure and lack of consumer confidence: fear of card fraud while making online payments is common.
Regulatory and Markets Information
Established in 1959, the Central Bank of Nigeria (CBN) is responsible for the financial regulatory framework here. Key responsibilities include the issuance of banking licences, the supervision of banking activities, ensuring safety and soundness in banking operations, stabilising the value of the Nigerian currency and ensuring the safety and efficiency of the national payment system.
Nigeria Payments Report | Entities Referenced
Access Bank
AfCFTA
AfDB
African Continental Free Trade Area
African Development Bank
African Export-Import Bank
Airtel Africa
American Express
Carbon
CashEnvoy
CBN
Central Bank of Nigeria
Continental Trust Bank
CTB
DealDey
Diamond Bank
Diners Club
Discover
Ecobank
eNaira
Facebook
FBN
Fidelity Bank
First Bank of Nigeria
First City Monument Bank
FirstBank
Firstmonie
Flutterwave
FUGAZ
GlobalPAY
GTB
GTBank
GTPay
Guaranty Trust Holding Company
Instagram
Interswitch
Jumia
Konga
Kuda
Mastercard
MoMo
MoMo Payment Bank Service
Mono
MTN
NDIC
NetPOS
NIBSS
NIBSS Instant Payments
Nigeria Inter-Bank Settlement System
Nigerian Deposit Insurance Corporation
NIPS
Okra
Olx Nigeria
Opay
Paga
Pan-African Payment and Settlement System
PAPSS
PayAttitude
Paystack
PayU
Polaris Bank
QuickBucks
Quickteller
Remitta
RyteDeals
Slot
Smartcash
Stanbic IBTC Bank
Standard Trust Bank
STB
Stripe
SwiftPay
Transparency International
Twitter
UBA
UCollect
Unified Payments
UnionPay
United Bank for Africa
Unity Bank
ValuCard
Verve
Visa
Wakanow
Webpay
WhatsApp
World Bank
Yudala
Zenith Bank
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Argus Advisory Research is delivering invaluable market and competitor intelligence on payments cards, e-money, acquiring/processing, retail banking, and consumer credit. Analysts and researchers use both primary and secondary source data and conduct in-depth interviews with senior industry executives and local experts.
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