Nigeria’s shift toward a cashless economy gathered remarkable momentum in the first quarter of 2025, as electronic payment volumes surged to ₦284.9 trillion, representing a robust 22% year‑on‑year expansion compared to the ₦234.4 trillion recorded in Q1 2024, according to data published by the Nigeria Inter‑Bank Settlement System (NIBSS).
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Quarterly Break‑Down: Q1 2025 Momentum
The growth in e‑payment activity was most notable in January 2025, when Nigerians conducted digital transactions worth ₦100 trillion. February experienced a dip to ₦88.8 trillion, likely a combination of calendar effects and seasonal slowdown—before rebounding to ₦96 trillion in March .
Monthly volumes mirror the value trend:
- January: ~792 million transactions
- February: ~687.5 million
- March: ~735.5 million
Totalling approximately 2.215 billion electronic payment transactions over the quarter.
What Fueled the Q1 2025 Surge?
1. Persistent Cash Shortages
Nigeria faced widespread cash scarcity in early 2025. With physical currency hard to access, consumers and merchants increasingly turned to digital channels—banks, USSD, POS, and mobile banking solutions—to carry out day‑to‑day transactions.
2. Fintech Expansion
A wave of fintech startups, especially in payments, contributed to enhanced financial inclusion. These platforms encouraged uptake by offering lean onboarding, user‑friendly mobile interfaces, and retail services suited to informal and SME sectors.
3. Account Proliferation
Growing trust in digital finance helped drive up account openings during the quarter. That trend, combined with renewed usage of dormant accounts, translated into higher transaction counts across digital rails.
4. Infrastructure & Interoperability Gains
The NIBSS Instant Payment (NIP) system—Nigeria’s flagship real‑time interbank transfer infrastructure launched in 2011—continues to underpin the growing digital ecosystem. NIP spans channels including internet banking, mobile apps, USSD, POS devices, ATMs, and more Nairametrics+3Nairametrics+3Brand Icon+3.
Innovation on the Horizon: NIBSS’ National Payment Stack
In Q1 2025, the NIBSS unveiled the National Payment Stack (NPS)—a next‑generation payment protocol designed to elevate Nigeria’s digital landscape. The new framework complements NIP by offering broader interoperability, scalable architecture, and enhanced settlement reliability.
Speaking at the Lagos unveiling, NIBSS Managing Director Premier Oiwoh emphasised that NPS is tailored for the future of Nigeria’s digital payments—a strategic shift aiming to future‑proof payment infrastructure.
How Nigeria Compares: 2024 vs. 2025 Q1
In 2024, Nigeria’s e‑payment volume breached the ₦1.07 quadrillion mark—an unprecedented milestone that signalled a near‑80% annual growth from 2023’s ₦600 trillion baseline
Within that context, the ₦284.9 trillion recorded in Q1 2025 reflects sustained growth consistency, forming a solid foundation for an anticipated ₦1.2 trillion+ trajectory for the year, potentially eclipsing 2024’s record total.
Quarterly Snapshot
| Month | Q1 2025 Transaction Value (₦ trillion) | Transaction Volume (million) |
|---|---|---|
| January | 100.0 | 792.0 |
| February | 88.8 | 687.5 |
| March | 96.0 | 735.5 |
| Q1 Total | 284.9 | ~2,215 |
Driving Forces of E‑Payment Adoption
Fintech Ecosystems Flourishing
Startups across payments, mobile wallets, and merchant services are deepening their reach into previously underserved markets, particularly in semi‑urban and rural localities.
Cash Scarcity Spurs Change
An acute shortage of physical currency continues to accelerate the adoption of digital alternatives, forcing many businesses and consumers to transition online out of necessity.
Rising Account Penetration
Millions of Nigerians now hold active bank or fintech accounts. Openings from early 2025 have already surpassed the total growth seen through most of 2024.
Policy & Regulatory Alignment
The government and Central Bank of Nigeria (CBN) have sustained support for cashless policy frameworks and digital innovation-friendly regulation.
Structural Evolution: From NIP to NPS
While the NIBSS Instant Payment (NIP) platform remains at the core of Nigeria’s digital transactions system, the rollout of the National Payment Stack (NPS) signals a strategic shift—toward a more modular and scalable infrastructure.
- NIP: Enables real‑time interbank transfers across existing digital channels.
- NPS: A newer, modern stack designed for enhanced efficiency, responsiveness, and interoperability across emerging digital services.
Together, these systems are poised to cement Nigeria’s leadership in African fintech infrastructure.
What’s Next: Outlook for H2 2025
- Sustained Growth: If the early momentum in Q1 persists, Nigeria could meet or exceed its 2024 full‑year total of ₦1.07 quadrillion.
- Fintech Innovation: Expect deeper adoption of QR codes, embedded payments in e‑commerce, wallet‑based remittances, and platform‑enabled credit.
- Inclusion Gains: Continued fintech-driven outreach may further narrow gaps in access, especially for SMEs and underserved communities.
- Regulatory Enhancements: Efforts to reinforce data integrity, consumer protection, and digital safeguards are expected to mature alongside growth.
Broader Impact: Socio‑Economic Implications
Financial Inclusion
As digital payments proliferate, previously unbanked populations gain access, enabling more Nigerians to participate in formal economic systems.
Cost Reduction
E‑payments cut transaction costs associated with cash handling, benefiting individuals, businesses, and the banking system alike.
Transparency & Traceability
Electronic transactions help curb corruption and fraud by creating digital audit trails, supporting regulatory oversight and accountability.
Economic Resilience
By reducing dependence on physical cash, Nigeria’s economy becomes more adaptable, critical in contexts of pandemic shocks, policy shifts, or liquidity challenges.
Conclusion
The ₦284.9 trillion e‑payment value recorded in Q1 2025 illustrates Nigeria’s deepening embrace of digital finance. With double‑digit annual growth, rising transaction volumes, and the rollout of new infrastructure like NPS, the country is accelerating its journey toward a truly cash‑lite economy. As fintech innovation continues and regulatory frameworks mature, Nigeria appears well on the path to sustaining its position as Africa’s digital payments powerhouse.
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