How money dominance and transfers hinder tap-to-pay in Nigeria
Why contactless payments wrestle to achieve traction in Nigeria
On October 13, CashAfrica announced a partnership with Food Concepts, a quick-service restaurant firm, to introduce cell tap-to-pay throughout Chicken Republic’s greater than 350 retailers, as half of its effort to make the fee methodology extra extensively adopted in Nigeria.
If you’ve got taken a Lagos Bus Rapid Transit (BRT) bus, you’ve got in all probability used tap-to-pay expertise. The blue Cowry card, operated by Touch and Pay Technologies (TAP) for Lagos’ transport authority, works throughout town’s street, rail, and ferry networks. TAP says it has greater than 300,000 active users and has processed over 56 million transactions throughout its operations. The motive the system works is that the cardboard and expertise are purpose-built for paying for transportation, and the contactless fee system is built-in into the journey, as commuters are required to faucet to pay earlier than boarding the bus.
It is a place to begin for understanding the problem dealing with contactless payments in Nigeria. The expertise for tap-to-pay is just not new. A contactless fee requires a buyer with a contactless card or near-field communication (NFC)-enabled system, a service provider with a appropriate terminal, and fee infrastructure that connects the transaction to the shopper’s financial institution or fee supplier.
Data from the Nigeria Inter-Bank Settlement System (NIBSS) exhibits that POS terminals processed 1.38 billion transactions price ₦18.32 trillion ($13.5 billion) in 2024. Cash has traditionally dominated how Nigerians pay, however it has been shrinking. Between 2014 and 2024, money transactions in Nigeria fell by 59%. What changed money transactions was digital payments.
This implies that Nigerians don’t should be satisfied that they’ll pay digitally, since they already do. What they don’t seem to be but satisfied of is why they need to pay this manner.
We’ve been right here earlier than
CashAfrica’s partnership with Chicken Republic is just not the primary try to make contactless fee a standard half of the fee course of in Nigeria. In 2015, Unified Payments, a Nigerian payments infrastructure firm, launched PayAttitude with six banks, together with Access Bank, UBA, Zenith Bank, Skye Bank, Diamond Bank, and FirstBank. The NFC-based service allowed clients to pay by tapping an NFC-enabled tag in opposition to a appropriate POS terminal. The tag might be connected to a cellphone or carried individually, and transactions had been linked to a pay as you go pockets.
In March 2025, Access Bank launched Tap to Phone with Visa, permitting retailers to simply accept contactless card and system payments straight on NFC-enabled Android telephones and not using a conventional POS terminal.
Each try solved half of the availability downside, both by making appropriate units simpler to distribute or by making service provider acceptance factors simpler to deploy. Still, none created a compelling sufficient motive for shoppers and retailers to alter fee behaviour at scale.
There can also be a belief downside. In a low-trust market like Nigeria, the place shoppers are cautious of fee fraud, eradicating a well-known safety step of PIN authentication can create friction about whether or not tapping is protected. Nigeria’s contactless guidelines now put some boundaries round that threat. In 2023, the Central Bank of Nigeria issued guidelines overlaying the authentication and threat administration necessities for contactless payments. The guidelines enable transactions of as much as ₦15,000 ($11.28) with out further verification and a cumulative each day restrict of ₦50,000 ($37.60).
The tap-to-pay methodology can also be competing with transfers, which have turn into a well-known fee methodology in elements of the nation.
By February 2023, because of the naira redesign policy and the ensuing money scarcity, forex in circulation fell from ₦3.29 trillion ($2.47 billion) in October 2022 to ₦982.09 billion ($738 million). As Nigerians struggled to entry bodily money, digital payments surged to an all-time excessive of ₦600 trillion ($451 billion) in 2023, a 55% enhance from the earlier 12 months.
The money scarcity compelled Nigerians to search out one other solution to pay. Circumstances made the choice needed, and repeated use made it acquainted, and tap-to-pay has no equal forcing operate. Other fee choices are nonetheless accessible, so being sooner alone is just not sufficient. The expertise has to supply a bonus that transfers, playing cards and money don’t, and make the distinction so apparent that customers and retailers have a motive to change.
What tap-to-pay unlocks
Tap-to-pay can acquire floor inside the already present POS community. NIBSS counted 8.3 million registered PoS terminals as of March 2025, some of which already assist NFC. NIBSS can also be liable for certifying fee terminals and purposes deployed in Nigeria, which creates a typical infrastructure layer throughout the business. The POS agent who presently handles transfers, processes card transactions, or dispenses money may turn into half of the tap-to-pay distribution community. The catch is {that a} terminal can settle for tap-to-pay and nonetheless have clients who would relatively make transfers.
Tap-to-pay suits into Nigeria’s cashless coverage agenda. When the CBN launched the coverage, it argued that the nation’s heavy reliance on money was expensive to handle, elevated the danger of theft and cash-related losses, saved cash exterior the formal monetary system, and restricted the effectiveness of financial coverage.
If tap-to-pay could make digital payments simpler on the level of buy, it may assist shift extra transactions from money to the formal digital economic system, decreasing cash-handling prices and income leakage.
The fee methodology may additionally normalise extra superior types of authentication throughout payments, together with biometric authentication. Nigerian firms have already experimented with this. Access Bank announced a facial biometric payment system in 2020, whereas Accelerex, a Nigerian fintech, launched Pay with Fingerprint on NIBSS-certified biometric POS units in 2024. However, like earlier contactless makes an attempt, these techniques have had few locations the place shoppers may use them. If tap-to-pay could make contactless authentication half of on a regular basis transactions, it may assist construct client belief in the fee methodology.
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