The Rise of Digital Payment in Nigeria!
The Need for Reispar’s Opensquare — Anomaly Detection Solution
The creation and use of cheques as a payment system can be traced back to the ancient banking system in which an order is requested by the clients to transfer money to identified persons. The cheque or bill of exchange eliminates the need for tradesmen to carry a large sum of cash to purchase goods and services.
What are cheque and payment systems?
According to Derek Roebuck, a cheque can be defined as an unconditional order in writing, addressed by a person to a bank, signed by the person making it, requiring the bank to pay on demand or at a fixed or determinable future time a sum certain in money to or to the order of a specified person or bearer.
Payment systems are mechanisms that enable the clearing and settlement of monetary and other financial transactions. Payment systems can be grouped into traditional (cheques) and electronic payment systems.
Nigeria has the largest economy in Africa and a population of over 200 million. Over 50 percent of the population has access to financial and fintech services and the country offers significant opportunities for businesses to expand, increase the income and gross domestic product (GDP) of the nation. For many years, cheques have been the only alternative to cash as a means of payment for goods and services but with the introduction of electronic payment systems in the finance and fintech industry, the use of cheques has greatly reduced as customers and businesses prefer the use of seamless and quick payment system to carry out their transactions.
Some of the new electronic payment systems used for various transactions include Automated Teller Machine (ATM), Point of Sale (POS), Internet (web), Mobile payment etc.
The number of Payment systems has surged in billions over the past years, spurred, in part, by the central bank’s financial inclusion drive and favorable regulatory policies. This includes the opportunity to establish various fintech institutions, payment channels, and systems to support the development. Some of the payment systems that gained ground over the years include Automated Teller Machine (ATM), Point of Sale machine (POS), Internet (web), and mobile payment transactions. Signup here to our wait list for RT Opensquare.
The downfall of cheques as a means of payment system in Nigeria
The positive development and acceptance of technology in the finance industry led to the increase in the number of transactions involving the electronic payment systems in Nigeria thus having an adverse effect which led to the decrease of cheque transactions as customers prefer using a paperless way to conduct transactions.
There has been a continuous increase in the number of ATM transactions since 2010 and from statistics, this serves as the most preferred until 2018 where there was a decline in the usage. The introduction of POS transactions in Nigeria supplements the payment system and this has a significant difference from 2016 to 2019 when compared with mobile payment, internet (web), and cheque transactions. Mobile payment and Internet (web) transactions also had a similar increase from 2017 but a surge occurred in the number of mobile payments in 2018. Signup to RT Opensquare
Likewise, the value of the payment system also increased with the introduction/improvements of technology in the financial sector except for cheque transactions. The value of cheque transactions decreased sharply over the years because the customers preferred paperless and stress-free means of transactions.
The value of ATM transactions increased alongside the number of transactions over the years until 2017 where it almost maintained the same value till 2019. The values of POS and mobile payment transactions also increased steadily from 2014 but a sharp increase was noticed in mobile payment from 2018, and values of mobile payment transactions would likely overtake the values of ATM transactions in the coming years.
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In conclusion, the introduction of modern means of payment systems in the financial and fintech industry has greatly reduced the use of cheques as well as the number and values of cheques in Nigeria. With the current trend, there is a possibility of cheque transactions being removed as a means of payment in Nigeria.
The advancement in technology through artificial intelligence has given rise to these new methods of payment in the financial sectors cutting across to other field such as the prepaid meter and cards overtaking the postpaid meter in the Energy industry, the use of internet to get detailed information in Telecom saving the stress of travelling and unnecessary research, modified gadgets replacing old and big ones, electronic voting machines and many others just to mention a few. Many companies have adopted and are still adopting the necessary artificial intelligence means to simplify their business decisions and consumers/clients are doing the same as well as no one wants to be left behind and as the days go by, newer means and improvement will be adopted for ease and comfort.
RTopensquare, a cloud-based product from Reispar Technologies, will be very useful as many businesses will be using it to detect anomalies, irregularities and to bring about quick and easy solutions to various technical problems thereby accelerating many business decisions and saving money, time and human energy. RTopensquare will make the impossible become possible digitally utilising artificial intelligence. DON’T BE LEFT BEHIND!!!
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