Cheques transaction hits lowest record in 8 years- NIBSS

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NIBSS

By Kayode Tokede

The Nigeria Inter-Bank Settlement System (NIBSS) has disclosed that volume of cheque transactions is at its lowest since 2009, dropping to 10.16million in 2017.

NIBSS in its cheque analysis obtained by Nigerian NewsDirect revealed that cheque transactions after reaching its peak in 2014 have gone into free fall since then with a 11 per cent compound annual growth rate (CAGR) between 2014 and 2017.

“This comes as no surprise as this method of payment is less fancied by generation Y and Z, with its survival heavily reliant on corporates and generation X,” the cheque report by NIBSS revealed.

According to NIBSS, the volume of cheques transactions was 13.54 million in 2009 but dropped to 12.54 million in 2010.

It also dropped further to 11.54 million in 2011 and increased to 12.15 million in 2012. In 2013, it closed at 14.21 million. The figure further increased to 15.28 million in 2015 but dropped to 11.72 million in 2016.

For value of cheque traded, report by NIBSS revealed that N5.35 trillion was transacted in 2017 from N5.83 trillion in 2016.

The highest value of cheque transaction was N17.54 trillion in 2009 but dropped to N7.15 trillion in 2010.

Current account holders dominated cheque transactions in 2017, controlling 84.6 per cent as against 15.4 per cent saving account.

By account type, 777,860 current account holders while 141.622 were savings accounts holders used cheques in 2017.

The report hinted that based on Biometric Verification Numbers (BVNs), there were 0.54 million unique individuals who issued cheque in 2017.

By location, NIBSS stated that, “41 per cent of cheques were issued in Lagos in 2017 while eight per cent cheque issuers reside in Abuja. Five per cent in Ogun; eight per cent in Rivers and four per cent in Oyo state.”

However, The Director, Banking and Payments System Department, Central Bank of Nigeria’s (CBN), Mr. Dipo Fatokun, recently said globally, cards have been the fastest growing payments instrument since 2010, as cheque use has declined consistently and significantly.

According to him, Debit cards accounted for the highest share (45.7 per cent) of global e-payment transactions and were also the fastest growing (12.8 per cent) payments instrument in 2014.

Fatokun said, “electronic products are gradually reducing the usage of cheques and cash, as noticed consistently in the annual performance report since the inception of the Cash-less Policy in 2012.”

Speaking on the Nigeria experience, he said, “Volume and value of transactions based on Cheques and NEFT have been consistently reducing annually since 2013, while same data for NIP, ATM, and Mobile Money channels have been on the increase.”

He stated that, “This is an indication of users’ preference for instant value channels over non-instant payment channels.

“The ATM Channel accounts for the highest volume of transactions, while the NIP accounts for the highest value of transactions annually. This is because the ATM is usually the e-payment channel that new and lower value account holders always interface with, while corporates and upwardly mobile middle class customers make transfers using NIP.”

It will be recalled that CBN, market stakeholders were in the move to reduce the settlement cycle of a cheque in Nigeria to one day, also known as cheque truncation system, across the country.

The move is in support of the apex bank’s cashless policy and to align the country’s economic policy with current trend around the globe.

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