Most Popular Online Payment Methods in Nigeria


 Online payment methods in Nigeria are growing exponentially and with so many new ones, there is a need to identify the most popular widely used online payment methods in Nigeria.

These popular online payment methods in Nigeria would explain the most used means of online payment which are card payments either credit or debit cards.

In every transaction, there are usually two sides – the buyer and the seller. So in identifying the most popular online payment method in Nigeria there would be a need to know the most popular and used amongst sellers and buyers alike.
Most Popular Online Payment Methods in Nigeria

Some online payment methods have more seller based incentives while some are buyer oriented and what this means is that when using this payment method buyers and sellers get some benefits from it.
Let’s take a look at some statistics which would easily show us the number of transactions made and value of these online payment methods in Nigeria.


Nigeria’s internet population has been on a steady rise from 2014 and for 2017 we add an estimate of 76.2 million internet users and it has been projected that in 2018 there would be an increase of internet users in Nigeria to 84.3 and also going forward to 2019 it can rise up to 93 million internet users in Nigeria.

There is also a rising number of active smartphones users in Nigeria from 2014 – 2019 with the projected number of estimated smartphone users in 2019 to be 23.3 million. In 2017, a total of 18 million smartphone users were recorded in 2017 with a projected increase in 2018 of about 20.5 million users.

cbn Most Popular Online Payment Methods in Nigeria

Payment Systems Statistics

These are Payment Systems Statistics from Central Bank of Nigeria website where you can generate LIVE statistics from different sectors and Nigeria and get real-time updated data straight from the Central Bank of Nigeria (CBN) website.

This statistics contains;
1.       Cheque Transactions
2.       ATM Transactions
3.       POS Transactions
4.       Internet (WEB) Transactions
5.       Mobile Payment Transactions
6.       NIBSS Instant Payment (NIP) Transactions
7.       E-bills Pay Transactions

Internet (Web) Transactions

These are web-based transactions or payments made through the internet without both buyer and seller physically presence. What this means is that both the buyer and seller need to have access to the internet first and be connected to the same online payment method.
This type of transactions can also be called online payments and the method widely used for online payment is debit or credit cards.

In the 1st quarter of 2017, the total Value of 46 Billion Naira Internet (web) Transactions and a total Number of Internet (web) Transactions was 5,520,058.00 was seen during January – March 2017.

During the 2nd quarter of 2017, the total Value of 37 Billion Naira Internet (web) Transactions and a total Number of Internet (web) Transactions was 5,965,106.00 was seen during April – June 2017.

There was growth in the number of internet transactions made around the 3rd quarter of 2017 with 2,058,835 internets (web) transactions were carried out valuing N514 billion, Source (Tribune   Online).

E-bills Pay Transactions

These are also online payment transactions involving payment of utility bills electronically possibly over the internet. The payment of utility bills online is somewhat still a new phenomenon to some Nigerians because of maybe lack of internet or exposure or simple fear.

Paying your utility bills online can help you greatly because it creates room for convenience where you don’t have to take time from your busy productive life to go somewhere, queue up for hours just a pay your light bill? All can be paid from your comfort zone and you can pay anytime.

A total of 289,165 e-bills payment transactions were recorded during the 1st quarter of 2017 which is valued at 159 billion Naira.

The second quarter of 2017 shows us a total of 235,823 transactions valued at 133 billion Naira.

Mobile Payment Transactions

This can still be related to online payment transactions because buyers can make purchases using their mobile phones through shopping websites, Mobile apps in-app purchase, e-wallet, app store purchases and other payments made through smartphones or mobile phones would still end up using either a debit card or credit card to finalize the purchase.

NIBSS Instant Payment (NIP) Transactions

These are the bank transfers, bank transaction codes for instant bank transfer of money between same banks and different banks. This relates to online payment because this facilitates the easy transfer of funds from one bank account to another bank account.

Bank transfers can now be done using our bank apps, which allow us to check our balance, transfer money to any bank using both the mobile app and Internet to do so.

Some transactions now in Nigeria are done through bank transfer because when cash is becoming obsolete and POS machines are not working properly, using your phone to transfer money to the seller is still the best and surest way because you have the money and means of payment which makes this a direct transaction because both buyer and seller don’t need any payment gateway before transaction can be done.

Why debit and credit cards are the most popular online payment method in Nigeria  

  • They are issued by your banks which gives you a sense of security so you can trust that your online payments would go through and if any issues arise you can easily contact your bank and get the issue resolved.
  • A large number of Nigerians have an ATM card, not all these ATM cards have been activated for online transactions but all of them are debit cards.
  • Cards are linked to your personal or business account so you know immediately if the transaction would work or because you clearly know how much the item or product cost and you know you have exactly that amount or something bigger in your bank account.
  • Cards provide a seamless synergy between your money – bank – sellers.
  • Card payments can easily be tracked between they leave digital footprints with you and your bank which can be used to verify transactional payments and prevent fraud or scam. Receipts can be generated which can be used online or printed and viewed offline.
  • Cards can easily be used for online payment because the card itself contains all the details you need starting from the card number, expiry date, name on card and CVV which is at the back of the card.
  • Some online payments involving card payments are most times one-time setups which would require you put in all the card details once and that’s all. For further transactions, your card is already saved and can be used instantly and you would be required to put in your CVV number. A good example is PayPal.
  • Cards can also double for ATM cards which can help you do some transactions offline through use of ATM machines or mobile app bank transfer.
Online Payment Methods in Nigeria

Benefits of Online Payment Methods

Online Payment Methods can mean different things to the buyer as well as the seller. Incentives can be used differently to attract new or old customers.

To Buyers

  • It’s an easy and secure way of making payments using their MasterCard, VISA or Verve card.
  • Buyers can conveniently pay for goods and services from anywhere at any time using online payment methods, they are not restricted by opening and closing hours.
  • Buyers can now make instant payment for goods and services.
  • Buyer’s interests are secured and in case anything goes wrong a full refund will be issued to the buyer.
  • An easy and cost-effective way of making payments because as a buyer when making an online purchase you don’t need to physically present before you buy which saves you cost of transportation, time and effort.

To Sellers

  • Sellers can integrate free payment gateway integration platforms on their websites or e-commerce store which would help them receive funds from buyers in exchange for their goods and service.
  • He or she can sell his goods and services safely without fear of scam because every transaction is automatically documented which doesn’t create room for lies and deceit.
  • When using a free online payment gateway, the seller only pays a little commission per transaction when using a free online payment gateway which is good for small stores who don’t have the money to buy an online payment gateway license yet.
  • Sellers don’t need to be online 24/7 before he can receive funds.
  • He gets the best security which would prevent his site from getting hacked and personal credit card information about his client from getting leaked.
  • Sellers gets more sales because as online payment spreads like wildfire so would their number of sales also increase plus it adds an extra line of income because they can do a combination of cash payments, POS transactions and still accept online payments.
  • Low labour cost: As an e-commerce store owner you won’t need to hire someone to stay in your shop 24/7 all you need is to hire a logistic person that would help you deliver your products or you can make deliveries yourself.

TechAdvance

TechAdvance is a payment application development company with a strategic focus in developing and deploying niche payment companies to serve the needs of large public and private sector organisations in Nigeria.

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