Nigeria’s Digital Payment Methods and Market Opportunities

The most populous country on the continent is also a promising hub for digital commerce and financial innovation. With over 210 million people, Nigeria has tremendous market opportunities fueled by digital and mobile payments.

In this blog post, we will unravel Nigeria’s remarkable digital transformation and payment methods, its evolving payments landscape, and the burgeoning potential for global brands to thrive in this promising market.

What are the new digital trends in Nigeria?

Online sales have gained momentum in recent years in the whole African continent. With numerous policies and initiatives promoting financial innovation and enhancing digital payments in Nigeria, the country is following Africa’s digital revolution trend. 

Although the country may still need to catch up to regional averages for digital adoption, introducing an open banking framework, instant payment rails, and new licenses for non-bank institutions has bolstered the financial ecosystem. These measures have facilitated the inclusion of underserved consumers and set the stage for new payment methods in Nigeria.

Key Statistics to Consider

According to EBANX’s Beyond Borders 2023, here are some of the new payment data from Nigeria’s digital landscape:

• Home to over 164 innovation hubs and hosting four of Africa’s seven unicorns, Nigeria has unique market opportunities.
• Mobile technology enjoys a 65% penetration rate among the population, clearly portraying the preference for mobile payments in Nigeria. 
• Mobile money ownership increased from 16% to 22% in 2022.
• Smartphones now constitute 44% of all mobile phones in Nigeria.
• Streaming services are a thriving digital vertical, accounting for 31% of Africa’s market.

Nigeria’s potential impact on West Africa

Nigeria’s digital progress isn’t limited to its borders. It is poised to positively influence the entire West African region, driving the adoption of digital payments and online shopping. Among these digital payments, mobile money is king, not only in West Africa but the whole continent.  

The chart below clearly shows how mobile money usage has become a trend in West Africa. This presents a substantial opportunity for global brands to expand their presence and reach a wider audience.

Nigeria’s payment methods challenges for 2024

While Nigeria’s digital prospects are promising, some challenges must be addressed. According to EBANX’s Beyond Borders Africa study, Internet connectivity, currently at 47% penetration, lags behind global averages, and the country faces issues related to currency stability. 

The Nigerian Naira’s fluctuation against the US dollar and limited availability of dollars have posed hurdles. Still, experts like Wiza Jalakasi from EBANX believe these challenges present opportunities for international businesses to navigate the market effectively.

The digital commerce preferences of Nigerian people

The growing appetite for cashless transactions has catalyzed digital commerce and alternative payment methods in Nigeria. The scarcity of paper money, government incentives, and changing consumer behavior drove electronic payments to a five-year high in 2022. Key highlights in this regard include:

• Bank Transfers: Nigeria’s 24/7 bank transfer system allows seamless interoperability between banks and mobile money operators. This payment method is ubiquitous for everything from bill payments to online purchases, making it a vital option for digital companies.

• Cash on Delivery Transformation: Cash on delivery has transitioned into an electronic payment method in Nigeria. When shipments arrive, consumers can make payments via electronic transfers through their mobile phones, reducing the need for cash payments.

• Emerging Fintech Alternatives: Fintech companies like Paga and OPay are introducing new alternative payment methods through mobile platforms, offering consumers more options and accessibility to financial services and contributing to the growth of digital payments in Nigeria. 

• Growing Mobile Money: While mobile money currently represents a small portion of Nigeria’s GDP (around 9%), it is steadily gaining ground and is a promising area for future growth.

• Credit Card Potential: Only 1.6% of Nigerians own a credit card, indicating untapped potential for further digital commerce growth.

The easiest way to expand to Nigeria is through digital payments

Nigeria’s digital development is transforming the country into a significant player in the global digital commerce landscape. With a young and tech-savvy population, burgeoning access to mobile technology, and a dynamic payments ecosystem, Nigeria presents an enticing opportunity for international businesses. 

As the digital revolution unfolds, decision-makers and top executives from global brands should consider Nigeria a top contender for expansion and focus on alternative payment methods, especially mobile payments, to reach a broader audience. What’s the easiest way to do that? Through an experienced and reliable payment partner!

EBANX has a complete payment solution to help global brands cross borders and process international payments in Nigeria and many other countries in Africa and Latin America. You can go beyond cards and offer the country’s most popular local payment methods through our services. 

The stage is set, and Nigeria is calling for global brands to embark on a journey into the heart of West Africa’s digital transformation. Don’t miss the chance to be a part of this exciting chapter of Africa’s economy, and count on EBANX to be your partner.

[Learn more about EBANX payment solutions for Nigeria]