The Nation Newspaper

Tag: digital payments

  • Real-time digital payments: Powering financial inclusion across Africa

    Real-time digital payments: Powering financial inclusion across Africa

    • By Tosin Eniolorunda

    Without exception, real-time digital payments are taking over from cash as the more convenient, efficient, and reliable payment method. Global transaction volumes are projected to reach 512 billion by 2027 – a level of adoption which promises to promote financial inclusion and economic empowerment at all levels of society.

    However, the transition from cash-based to digital transactions has been quicker in some regions than others. In Africa, for instance, cash has remained a popular payment method due to customers’ preference for instant value exchange. This is especially important for low- or irregular-income households as they look to pay bills and meet other financial obligations. Similarly, businesses with low working capital, including those operating in the informal economy, can often display a preference for cash.

    However, cash is cumbersome and economically limiting. Notably, cash needs to be physically carried everywhere – rendering it prone to theft and inadequate for any transactions which transcend in-shop purchases. It is also unfit for functions such as domestic remittances and local trade between cities. Over-reliance on cash therefore constrains market liquidity and stunts economic potential.

    Cash also creates a hefty burden for central banks due to the cost of printing, transporting, and protecting physical volumes of cash. In 2020, the Central Bank of Nigeria spent N58.6 billion on printing cash – and yet more on transportation, security, and other infrastructure requirements to manage it.

    There is, however, an alternative which enables instant value exchange without the logistical challenges perennially attached to cash-based transactions. Real-time digital payments offer the best of both worlds: immediate settlement, efficiency, and improved security. Gone are the days of customers needing to physically visit a bank branch and fill out a form to move their money. Now, all transactions – big or small – can be completed and managed digitally.

    The development of robust fintech infrastructure in Africa means real-time digital payments are reshaping the continent’s entire payments ecosystem, from consumer bill settlements to cross-border business-to-business (B2B) commerce – offering lower transaction fees; enabling new business models; and promoting financial inclusion.

    The benefits are substantial. For consumers, real-time digital payments mean instant access to funds, greater convenience, more financial flexibility, and easier access to credit and other financial services. For businesses, it means enhanced cash flow management and transaction processing, improved operational efficiency, and a smoother customer experience. Digital payments can also mitigate money laundering and fraud risks and decrease the amount of working capital needed for daily operations – empowering informal enterprises which are often the lifeblood of local economies.

    In essence, real-time digital payments enable more transparent financial ecosystems which create a virtuous cycle of financial empowerment for previously underbanked individuals and businesses – promoting economic growth at the national and sub-national level.

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     Real-time digital payments are already an established financial reality in some African markets. Nigeria is a leader in this area, not just on the continent, but globally too – its NIBSS Instant Payments (NIP) system is the sixth-largest real-time payments system in the world, processing billions of naira daily and more transactions yearly than equivalent payment systems in the U.S.

    NIP is the invisible financial infrastructure powering every financial interaction in Nigeria. The use of NIP transfers for every day, lower-value transactions is becoming more common as real-time digital transactions gradually usurp cash as the country’s favoured payment method. In 2024, more than 12 billion instant money transfers were completed in Nigeria – up from 9.7 billion in 2023 – and the rising adoption of this payment method in the Nigerian marketplace has been transformative for SMEs, saving them an estimated $296 million in 2021.

    As the adoption of digital payments continues to grow, the Nigeria Inter-Bank Settlement System (NIBSS), in June 2025, moved to future-proof the current system by launching the National Payment Stack (NPS), a next-generation digital payment infrastructure compliant with ISO 20022 – the global messaging standard for secure and data-rich financial transactions. Only a few days ago, NIBSS announced the first successful transaction on the NPS signalling the dawn of a new era of speed, innovation, and interoperability in payments.

    This move represents a significant, demonstrable shift towards building a more inclusive financial landscape; one where the barriers to entry are lowered for underserved communities. It promises to engender a dynamic ecosystem where innovative services are accessible to all citizens irrespective of their location, language, or faith.

    With continued government backing, real-time digital payments will continue to shape the commerce ecosystems of Africa’s present and future – especially as trust and adoption continue to grow. Sustaining this positive trajectory depends on harnessing pioneering fintech platforms to connect higher volumes of consumers and enterprises to this exciting financial world which has the power to transform businesses and lives.

    The future for real-time digital payments in Africa is bright, and the benefits will be felt by all: boosting economic potential and output; supporting trade and value exchange within and between countries; and promoting financial inclusion continent-wide.

    •Eniolorunda is the founder and group CEO, Moniepoint Inc.

  • How digital payments are changing the business landscape

    How digital payments are changing the business landscape

    • By Mofiyinfoluwa Faniyi

    Convenience, speed, and security are now the top priorities for businesses, and as a result, millions of customers and businesses are choosing digital payment methods over the more traditional use of cash and bank cheques.

    Digital payment technologies, ranging from mobile wallets to blockchain transactions, are transforming commerce, improving consumer experiences, and opening new opportunities for businesses throughout the world.

    The significance of digital payments is critical for business leaders, professionals, and aspiring business owners to understand. This transition is more than just replacing cash with electronic transactions, it signifies a fundamental transformation in how businesses function, interact with consumers, and expand their reach.

    Enhancing business efficiency and security

    The efficiency that digital payments offer organisations is one of their biggest benefits. Unlike cash transactions, which involve physical handling, storage, and human recordkeeping, digital payments make processes more efficient because transactions are handled in real time, significantly reducing administrative hassles and mistakes.

    Another benefit of digital payment methods is security, as the concern about theft, counterfeit currency or cash mismanagement has greatly reduced. Digital transactions provide enhanced fraud protection through technologies such as encryption, multi-factor authentication, and biometric verification. Payment systems also provide automatic record-keeping, which facilitates financial reconciliation and reduces the possibility of human error.

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    For business owners managing medium to large scale business operations, taking advantage of automated digital invoicing and payment models based on subscriptions can help simplify the billing process and ensure timely collection of payments, which would improve cash flow management and ultimately lead to business sustainability.

    Transforming customer experience

    The advent of digital payments has dramatically shifted consumer behaviour as many customers today demand transactions to be easy, fast, and safe. Whether it is touching a bank card at the checkout, scanning a QR code at a restaurant, or completing a one-click online transaction, convenience has become the gold standard. In the current times where thousands of businesses spring up every day, this transformation, for a lot of businesses is about more than just keeping up with the times, it is about staying relevant, as businesses that do not get with the program risk losing clients to competitors that provide the seamless, hassle-free services that customers are requesting.

    Consider an e-commerce website that offers multiple payment options, as opposed to one that only takes bank transfers; the difference may mean losing a sale in seconds.

    Speed and convenience are however not the only reasons for utilising digital payment methods, but the need for personalisation also comes in. In retail specifically, mobile payments can be integrated with loyalty programs for businesses to instantly reward customers for their purchases. In a nutshell, payments today are not just transactions, they are an integral part of the customer experience, and the faster businesses recognise this and embrace digital solutions, the earlier they begin to build connections, boost client satisfaction and stay ahead of the curve.

    Enabling financial inclusion and global reach

    Digital payments have removed geographical constraints, allowing businesses to grow outside their local markets. Online payment gateways and international remittance services enable businesses to conduct transactions with consumers and suppliers all around the world, creating new prospects for development.

    For potential business owners and small company owners, digital payment methods provide a way into the global market with platforms like PayPal, Stripe, and the likes enabling businesses to reach worldwide clients without the need for a complicated banking infrastructure. The rise of cryptocurrency payments has further decentralised financial transactions, allowing businesses to operate across borders free of traditional banking limits. Financial inclusion is also a benefit of digital payments, with mobile money solutions empowering millions to have access to banking services and providing small business owners and informal traders the opportunity to accept online payments thereby reducing dependency on cash and enabling financial growth.

    The role of government and regulation

    As digital payments increase in Nigeria, the government and regulatory organisations have been playing an important role in creating a safe and efficient environment. The Central Bank of Nigeria (CBN), along with organisations such as the Nigerian Financial Intelligence Unit (NFIU) and the Nigeria Inter-Bank Settlement System (NIBSS), has implemented measures to improve digital payment security, combat financial fraud, and promote financial inclusion. Regulations governing data privacy, anti-money laundering compliance, and consumer protection assist to guarantee that digital transactions are secure and trustworthy for both businesses and consumers.

    The Nigerian government has initiated many measures to promote the use of digital payments, including the cashless policy, which encourages electronic transactions while discouraging the use of paper currency. To improve security and confidence in online transactions, digital identity verification methods such as the Bank Verification Number (BVN) and National Identification Number (NIN) systems were created many years ago.

    Businesses, on the other hand, must keep up with changing legislation to be compliant. The CBN’s e-payment standards, which include the Know Your Customer (KYC) framework and fintech license requirements, have a direct influence on how enterprises operate in the digital payment market. With Nigeria’s thriving fintech industry and rising smartphone penetration, government regulations will continue to influence the future of digital payments, and only businesses who follow these standards and use secure digital payment systems will be well-positioned to flourish.

    It is now essential for professionals, business owners, and prospective entrepreneurs to embrace digital payments. Consumer demand, technology breakthroughs, and legislative changes are all contributing to the acceleration of the transition to cashless transactions and businesses that accept digital payments get a competitive edge by increasing efficiency, security, and consumer pleasure.

    The future of business transactions is digital, whether through mobile wallets, blockchain solutions, or artificial intelligence-powered payment systems. The time to adapt is now.