NIGERIA: Banks’ incomes from e-payment rise by 64% to N212.66bn

Increased investment in technology and the introduction of new online payment channels earned Nigerian banks N212.66bn in 2019, IFE OGUFUWA reports

The earnings of Nigeria’s Deposit Money Banks from electronic payment platforms grew by 64 per cent to reach N212.66bn in 2019.

With many bank customers avoiding the banking hall and leveraging the more convenient digital platforms for various financial transactions, earnings of the financial institutions have continued to grow.

Also, financial technology companies with products that facilitate payments on their platforms in partnership with the DMBs have contributed significantly to the earnings of these banks.

An analysis of the audited 2019 financial reports of 11 banks showed that their collective revenue from electronic transactions grew by 64 per cent year-on-year from N130.03bn they earned in 2018.

The analysis showed that incomes on electronic transactions were the highest out of all the fees and commissions from various financial products of more than six banks.

The income on electronic business of these banks comes from Automated Teller Machine transactions, the USSD, online transfers, electronic bill payments, Remita, Point of Sale payments and agency banking, among others.

Some of the banks assessed were Zenith Bank Plc, First City Monument Bank Plc, Access Bank Plc, Guaranty Trust Bank Plc, United Bank for Africa Plc, Sterling Bank Plc, First Bank of Nigeria Limited and Fidelity Bank Plc.

Others are Jaiz Bank Plc, Union Bank of Nigeria Plc, and Wema Bank Plc.

Access Bank’s income from electronic payments more than doubled in 2019 as it grew its e-business by 154 per cent from N14.16bn in 2018 to N36.04bn in 2019.

Zenith Plc also doubled its earnings from its electronic products in one year, recording 108 per cent increase in income from N20.42bn earned in 2018 to N42.51bn in 2019.

With N15.66bn e-payment revenue in 2019, GTB Plc reported a 63 per cent increase in its electronic banking income as against N9.59bn earned in 2018.

Union Bank Plc generated N7.69bn from electronic payment charges in 2019, representing a 63 per cent increase from the N4.73bn it earned in 2018.

FBN’s electronic business income closed 2019 with N47.97bn, an increase of 41 per cent over the N34.03bn revenue earned in 2018.

For Sterling Bank Plc, its electronic products earned it N6.79bn in 2019, representing 40 per cent growth from N4.85bn the bank generated in 2018.

UBA Plc grew its electronic business income by 39 per cent, as it reported N38.77bn as its e-payment earnings in 2019 as against N27.92bn in 2018.

Fees and commissions on digital payments earned by FCMB Plc in 2019 amounted to N11.04bn as against N8.32bn the bank earned in 2018. This shows 33 per cent year-on-year growth.

Jaiz Bank recorded an improvement of 26 per cent on its electronic payment earnings as it reported N406.65m income in 2019 as against N322.53m in 2018.

Fidelity Bank Plc recorded e-payment growth of three per cent in one year as it reported N2.95bn as earnings in 2019 as against N2.85bn in 2018.

From Wema Bank Plc’s financial report, its electronic payment income remained unchanged as the bank reported N2.85bn in 2018 and 2019.

In January, a Revised Guide to Bank Charges issued by the Central Bank of Nigeria, reviewed downward electronic transfer and the ATM charges as well as card maintenance fees.

The apex bank said the new charges, which came into effect on January 1, aimed to reduce the costs of banking services to customers and encourage them to embrace electronic channels.

The CBN directed Nigerian banks and other institutions facilitating payments to implement N10 for electronic transfers below N5,000, and N25 for electronic transfer between N5,000 and N50,000.

Previously, bank customers paid N50 charge for electronic transfers below N500,000.

“Only electronic transfer above N50,000 will attract N50 charge,” the CBN said.

The guidelines, which had since been implemented by the financial institutions, also slashed charges for cash withdrawal via other banks’ ATMs to a maximum of N35 after the third withdrawal within the same month from N65 after the third withdrawal within the same month.

Since the lockdown took effect in Abuja, Lagos and Ogun states, all the banks have advised customers to leverage online banking channels to facilitate payments and use the ATMs across the country to make withdrawals.

In a joint statement by the  Minister of Finance, Budget and National Planning, Zainab Ahmed, and the CBN Governor, Godwin  Emefiele, they informed Nigerians that they had obtained exemptions from the President, Major General Muhammadu Buhari (retd.), to allow skeletal operations in the financial system and money markets during the lockdown.

In a separate statement by the Director, Corporate Communications at the CBN, Mr Isaac Okorafor, the bank called on customers of banks to limit their use of cash and avail themselves of the use of alternative payment channels such as mobile banking, Internet banking, mobile money, point of sale and the USSD.

“The public is therefore assured that financial institutions will remain operational during this period and therefore should guard against panic withdrawals from their banks,” the CBN spokesman added.

The Chairman, Association Licensed Telecommunications Operators of Nigeria, Mr Gbenga Adebayo, said a lot had been done in terms of capacity deployment to ensure good quality of service of telecoms networks throughout the period of coronavirus lockdown.

In the area of network sharing, Adebayo stated that members agreed that telecoms operators should collaborate to share resources in times of difficulties throughout the period that the coronavirus would last.

Checks on the Nigeria Inter-Bank Settlement System on Saturday showed the NIP transactions, which were highly dependent on Internet connectivity, had mostly been successful, recording a low failure rate less than one per cent.

Point of Sales transactions, on the other hand, recorded failure rate lower than 15 per cent.