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Customers Dump POS, Return To Banks’ ATM, Other Channels



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The usual high patronage of Point of Sale (PoS) ser­vices in the country is in reverse trend as bank cus­tomers now resort to Au­tomated Teller Machines (ATM) and other channels like online banking, Un­structured Supplementa­ry Service Data (USSD), among others.

In the heat of COVID-19, last year, banks and other financial companies were restricted in receiving cus­tomers as a way to prevent the spread of the pandem­ic.

The development triggered the proliferation of PoS ser­vice operations in the country for easy access to cash. Despite the charges for the services, which were more than those of banks’ ATM services, many Nigerians thronged the PoS service centres for their trans­actions.

However, in recent times, there have been reports of fraudulent activities being or­chestrated by scammers who fleece unsuspecting customers of their cash through deceptive methods through PoS.

The unsavory #EndSARS campaign which caused hav­oc to some banks’ ATMs with cash looted, boosted PoS ser­vice patronage by most Nige­rians.

A recent report revealed how some PoS operators and even those who pretend to be customers waiting for trans­actions would feign making phone calls while distracting genuine customers’ attention to take pictures of their ATM cards’ details.

Speaking with Daily Inde­pendent, Hassan Adekoya, a PoS operator, disclosed that there is low patronage of PoS services by customers. He said the cause is partly linked to relaxation of COVID-19 re­strictions.

“The business is not prof­itable as before. I discovered that many of my customers now use banks’ ATMs which were not very functional be­fore, especially last year when the pandemic was still scary. I am bothered because I am not making the type of profit I used to make. The consolation I have is that I have other items I sell along the PoS business and I didn’t employ anybody that I am paying salary,” he explained.

Investigations by Daily Inde­pendent revealed that some PoS operators are already closing shops because of low patron­age. The development is becom­ing a replica of what phone call business centres used to be at the early stage of Global Sys­tem for Mobile (GSM) commu­nications in Nigeria.

To attest to the apathy some people are now having toward PoS service, the month of May, 2021, recorded a transaction de­cline of 0.8 percent.

The recorded drop is for second consecutive month. Month-on-month (MoM), it fell to N503.96 billion in May from N507.9 billion in April.

The latest data from Nigeria Interbank Settlement System Plc (NIBSS) shows the value of transactions through PoS terminals declined marginal­ly by 0.76 percent (N3.9 billion) in May.

According to the report, PoS payments in May were valued at N503.96 billion compared with N507.86 billion in the pre­vious month, despite growing demand and push for cashless transactions.

Further analysis of NIBSS’ data showed that there had been an intermittent reduction in the value of PoS payment since January. It was observed that the value of PoS payments dropped by 4.6 percent in April to N507.86 billion as against N531.38 billion recorded in March.

Also, PoS transactions dropped to N468.9 billion in February from N489.24 billion in January. This is an indica­tion that out of five months, there had been a reduction in the value of transactions in three months, this year.

However, the uptake of PoS business for cashless pay­ment has been on the rise with NIBSS’ data showing that the total number of PoS termi­nals deployed in the country increased by 67.1 percent to 510.773 at the end of March this year, from 305,725 in the corresponding period of last year.

The data also indicate that the total number of registered PoS terminals as of the end of March 2021 stood at 783,136 compared with 470,122 in the same period of last year.

Also, a further review of NIBSS’ data showed that the value of POS transactions has maintained an upward trend in the last three years.

However, the volume of PoS transactions increased by two percent, MoM, to 79 million from 77.6 million in April.

NIBSS disclosed this in its electronic payment report for May.

The NIBSS report revealed a marginal increase in the val­ue of e-payment transactions to N22.24 trillion in May from N22.23 trillion in April. This represents 0.05 percent MoM increase.

On the other hand, the vol­ume of e-payment transactions rose MoM by 5.0 percent to 379.98 million in May from 363 million in April.

The e-payment channel that recorded the highest increase in volume of transactions in May was Automated Direct Debit (ADD) which rose by 16 percent MoM to 1.82 million from 1.57 million in April.

However, the value of ADD transactions fell by 11 percent MoM to N84.96 billion in May from N95 billion in April.

The channel that recorded the highest increase in value of transactions was mobile, which rose by five percent (MoM) to N526.9 billion in May from N502.7 billion in April.

The volume of mobile trans­actions also rose by seven per­cent (MoM) to 19.7 million from 18.4 million in April.

Further analysis showed that the volume of NIBSS In­stant Payment (NIP) transac­tions rose by 5.2 percent MoM to 279 million in May from 265 million in April while the val­ue rose by 0.05 percent MoM to N20.7 trillion from N20.69 trillion in April.

The volume of cheque transactions rose by seven percent MoM to 339,667 in May from 318,767 in April while the value rose by 1.2 percent to N246.6 billion in May from N243.69 billion in April.

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