ATM Usage in Nigeria Dropped to 40% in 2023

Over Naira Scarcity.
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A recent report by KPMG has revealed that weekly Automated Teller Machine (ATM) usage among Nigerians dropped from 70 per cent in the past few years to 40 per cent in 2023.

The report titled ‘In Pursuit Value’, surveyed customers of Nigerian and Ghanaian banks and curated their experiences during the year 2023.

It was learnt that ATM usage in Nigeria has witnessed a notable decline due to the regular unavailability of cash in many stations.

It stated that the medium digital transactions dropped from the top to outside the top ten in the survey.

Currently, the report stated that four in ten customers report weekly ATM usage, which it said was a notable decline from the previous seven in ten over the last few years.

According to it, the decline in ATM usage coincides with a significant rise in agency banking usage, with six in ten customers frequenting bank agents every week.

The study further revealed that the rise in agency banking emphasises the continued popularity of cash, underscoring customers’ quest for more readily available cash options, primarily driven by the popularity of bank agents across the nation.

The survey also noted that payment via digital mediums rose by 52 per cent in 2023 between January and October according to NIBSS data.

It explained that the spike in digital payments was triggered by the cash crunch occasioned by the Central Bank of Nigeria’s (CBN) naira redesign policy in the first quarter of 2023.

It stated: “Consequently, digital payments surged, marking a notable 52 per cent increase in total NIBSS Instant Payment (NIP) transactions by October 2023 compared to January of the same year. This was triggered by the Central Bank of Nigeria’s initiative to overhaul the Naira, aiming to regulate cash circulation and reduce reliance on physical currency.”

It further explained that the rise in digital payment overwhelmed Tier-1 banks with multiple cases of transaction failure but fintechs such as Opay, PalmPay, and Moniepoint rose to the challenge leading to a significant change in customers’ preferences.

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