By Kehinde Ibrahim, Lagos
NIGERIA’S electronic payments market recorded a notable shift in the first quarter of 2026, as the amount of money transferred through major digital payment channels increased, though the number of transactions declined significantly. The development points to a changing pattern of payment activity, with fewer transactions accounting for a larger proportion of the funds moving through the financial system.
Data from the Central Bank of Nigeria ,CBN, showed that the value of electronic transactions processed through six major channels rose to N1.053 quadrillion in the first quarter of 2026, representing a 2.85 per cent increase from N1.024 quadrillion recorded in the corresponding period of 2025. However, transaction volume declined by 9.19 per cent year-on-year, from 13.84 billion transactions to 12.57 billion.
The six channels covered by the CBN data are cheque, Automated Teller Machine ,ATM, Point of Sale ,POS, Web Pay, Mobile Pay and Nigeria Instant Payment ,NIP.
The divergence between transaction value and volume is significant because it suggests that the expansion of electronic payments in Nigeria is no longer necessarily being driven by an increase in the number of transactions. Instead, the data indicate that transaction values are rising even as activity measured by transaction count contracts.
The CBN disclosed the figures in its quarterly statistical bulletin for the first quarter of 2026, providing an indication of how consumers, businesses and other economic agents interacted with the country’s payment infrastructure during the period.
The figures paint a mixed picture across the various channels, with some recording strong growth while others suffered significant declines. Mobile Pay emerged as the strongest performer in terms of transaction volume, while ATM transactions recorded the most substantial increase in value.
At the other end of the spectrum, POS transactions recorded one of the sharpest declines, both in volume and value. Cheque transactions also continued their downward trend, reflecting the increasing preference for electronic alternatives.
The performance of POS transactions was particularly striking. Transaction volume through POS terminals declined by 19.90 per cent year-on-year, falling from 3.64 billion transactions in Q1 2025 to 2.92 billion in Q1 2026.
The decline represents approximately 724 million fewer POS transactions within one year. In value terms, POS transactions dropped by 16.42 per cent, from N70.98 trillion to N59.33 trillion.
The decline is noteworthy because POS terminals have become an important component of Nigeria’s financial services ecosystem. For years, POS agents have provided access to cash withdrawals, transfers, payments and other financial services, particularly in communities where conventional banking facilities are limited.
The contraction in POS activity could therefore have implications for the country’s financial inclusion efforts if it represents a sustained decline in the use of agent banking.
However, the decline could also indicate that customers are increasingly moving transactions to other digital channels. The rapid expansion of mobile banking applications and instant payment services has given consumers alternatives to physical POS terminals, potentially reducing the need to visit agents for transactions that can now be completed remotely.
The performance of Mobile Pay provides some support for this possibility. Mobile Pay transaction volume increased by 28.60 per cent year-on-year, rising from 2.08 billion transactions in Q1 2025 to 2.67 billion in Q1 2026.
Its transaction value also increased, although at a considerably slower rate. The value of Mobile Pay transactions rose by 7.73 per cent from N104.07 trillion to N112.12 trillion.
The figures suggest that mobile platforms are becoming increasingly important for routine financial activities. Consumers can use mobile applications to transfer funds, make payments, purchase services and carry out other transactions without relying on physical banking locations or agents.
The stronger growth in transaction volume compared with transaction value also suggests that a significant proportion of Mobile Pay activity may involve relatively smaller-value transactions.
This contrasts with the performance of NIP, where transaction volume declined while transaction value increased substantially.
NIP transactions fell by 17.70 per cent year-on-year in volume, from 2.22 billion in Q1 2025 to 1.82 billion in Q1 2026. Despite the decline in volume, transaction value increased by 12.55 per cent, from N284.99 trillion to N320.76 trillion.
The development suggests that NIP continued to facilitate significant financial flows despite processing fewer transactions. The increase in value could indicate greater use of instant payment infrastructure for larger transfers between individuals, businesses and financial institutions.
The contrasting movement in NIP volume and value further strengthens the evidence of a changing transaction mix within Nigeria’s electronic payment system.
Rather than simply increasing the number of payments conducted electronically, the financial system appears to be handling a greater concentration of higher-value transactions through certain channels.
Web Pay also recorded a decline in activity during the period. Transaction volume fell by 14.14 per cent year-on-year, from 5.50 billion transactions in Q1 2025 to 4.72 billion in Q1 2026.
However, the decline in transaction value was much smaller, falling by only 2.42 per cent from N542.99 trillion to N529.82 trillion.
Web Pay remained one of the largest channels in the CBN’s dataset by both transaction volume and value. Its performance demonstrates that a decline in the number of transactions does not necessarily translate into a proportionate decline in the amount of money being transferred.
The relatively small reduction in value compared with the much sharper fall in volume suggests that the average value of transactions conducted through the channel may have increased.
The development could reflect changes in consumer and business behaviour, including greater consolidation of payments, changes in online purchasing patterns or migration of smaller transactions to mobile-based platforms.
The ATM channel presented perhaps the clearest example of the widening gap between transaction volume and value.
ATM transaction volume increased by 6.60 per cent year-on-year, from 411.42 million transactions in Q1 2025 to 438.59 million in Q1 2026.
But transaction value surged by 64.62 per cent, from N15.97 trillion to N26.30 trillion.
The sharp increase in value compared with the relatively modest growth in transaction volume suggests that significantly more money was being withdrawn per transaction on average.
This could reflect changes in consumers’ cash management behaviour, including larger withdrawals per visit. It could also be associated with wider economic conditions influencing the amount of cash required by households and businesses.
The figures demonstrate that the expansion of digital payment infrastructure has not eliminated demand for cash. Although electronic transfers and mobile payments have continued to gain ground, ATMs remain an important part of Nigeria’s financial system.
Nigeria’s payment landscape therefore continues to operate as a combination of electronic and cash-based transactions, with consumers moving between channels depending on their needs, the size of transactions and the accessibility of payment infrastructure.
Cheque transactions, by contrast, continued to lose ground.
Cheque transaction volume declined by 15.01 per cent year-on-year, from 3.57 million in Q1 2025 to 3.04 million in Q1 2026. The value of cheque transactions also declined, falling by 2.93 per cent from N5.15 trillion to N5 trillion.
The continued decline of cheque usage is consistent with the long-term transformation of Nigeria’s payments industry. Electronic transfers provide faster settlement and greater convenience, making traditional paper-based payment instruments increasingly less attractive for many consumers and businesses.
The declining role of cheques is therefore likely to continue as digital payment infrastructure becomes more accessible and electronic alternatives become increasingly integrated into everyday economic activity.
Despite the different performances recorded across the six channels, the overall figures point to an important development in Nigeria’s financial system.
The country processed N1.053 quadrillion worth of electronic transactions in the first quarter, yet the total number of transactions fell by more than one billion compared with the same period of 2025.
The figures raise important questions about what is driving the increase in electronic payment value.
One possible explanation is the growing use of electronic platforms for higher-value transfers. As consumers and businesses become more accustomed to digital payments, electronic channels are increasingly being used for transactions that were previously conducted through cash, cheques or other conventional methods.
Another possible factor is the redistribution of transaction activity among competing payment channels.
The decline in POS and Web Pay volumes occurred alongside strong growth in Mobile Pay. This could indicate that consumers are shifting from physical payment points and conventional internet-based transactions towards mobile applications.
The increasing adoption of smartphones and mobile banking platforms has made it easier for customers to conduct financial transactions from virtually anywhere.
This shift could have significant implications for banks, fintech companies, payment processors and POS operators.
Financial institutions may need to invest more heavily in mobile infrastructure, cybersecurity, transaction reliability and customer support as mobile payments become increasingly important.
At the same time, POS operators may have to reconsider their business models if customers continue moving routine transactions from physical agents to mobile platforms.
However, the decline in POS activity should not automatically be interpreted as evidence that agent banking is becoming irrelevant. POS agents continue to serve an important role in communities where customers face challenges accessing formal banking infrastructure, reliable internet services or digital financial platforms.
For this reason, stakeholders will need to determine whether the decline is temporary, channel-specific or part of a longer-term structural shift.
The changing payment landscape also presents challenges for financial inclusion.
While mobile and internet-based payments can improve convenience, they require access to smartphones, telecommunications networks, electricity, data services and sufficient digital literacy. Customers who lack these resources could potentially be left behind if physical payment channels decline too rapidly.
The regulator and industry operators therefore face the task of balancing digital transformation with accessibility.
The security of electronic transactions is another increasingly important consideration. As more money moves through digital platforms, the potential impact of fraud, cyberattacks, system failures and other disruptions becomes greater.
The increase in transaction value recorded in the first quarter means that payment infrastructure must be capable of handling substantial financial flows efficiently and securely.
For financial institutions and payment service providers, reliability will be crucial. Customers are unlikely to embrace digital payment systems fully if failed transactions, delayed reversals, service interruptions or fraud concerns remain persistent.
The latest CBN figures therefore provide an important measure of the changing structure of Nigeria’s digital economy.
The growth in electronic payment value demonstrates the continued importance of digital channels in economic activity. But the decline in transaction volume shows that the market is evolving in ways that cannot be captured by simply measuring how many payments Nigerians make.
The composition of those transactions is becoming increasingly important.
Mobile Pay recorded the strongest growth in volume, increasing by 28.60 per cent, while ATM transaction value recorded the strongest growth, rising by 64.62 per cent. Meanwhile, POS transaction volume declined by 19.90 per cent, NIP volume fell by 17.70 per cent, Web Pay volume declined by 14.14 per cent and cheque volume dropped by 15.01 per cent.
These movements reveal a clear redistribution of activity across the payment ecosystem.
The figures also suggest that the future of Nigeria’s electronic payments market will be shaped not merely by the number of transactions conducted, but by the channels through which they are conducted and the value associated with them.
The sharp increase in ATM transaction value, for instance, suggests that cash remains relevant despite the digitalisation of financial services. Similarly, the strong growth in Mobile Pay volume demonstrates the increasing importance of mobile technology in everyday financial activity.
NIP’s rising value despite falling volume, meanwhile, indicates that instant payment infrastructure continues to handle substantial financial flows.
Web Pay’s relatively modest decline in value despite a much larger reduction in volume reinforces the same pattern.
The overall result is a payments system in transition, with traditional channels losing ground in some areas while newer digital channels continue to expand.
For consumers, the transition could provide greater choice and convenience. For businesses, it could reduce reliance on physical payment infrastructure and create opportunities for new digital products and services.
For regulators, however, the changing landscape will require continuous monitoring to ensure that innovation does not come at the expense of stability, consumer protection or financial inclusion.
The first-quarter data also suggest that the digitalisation of Nigeria’s financial system is becoming more sophisticated. The issue is no longer simply whether Nigerians are adopting electronic payments. Increasingly, the question is which channels they prefer, why they choose them and what type of transactions they conduct through each platform.
The answers will be important for financial institutions planning investments in payment infrastructure and for policymakers developing strategies around financial inclusion and digital finance.
If the trend continues, transaction value could remain a more important measure of payment-system activity than transaction volume alone.
The rise to N1.053 quadrillion in electronic transaction value, despite a 9.19 per cent decline in transaction volume, demonstrates that the country’s payments ecosystem is undergoing a significant transformation.
It may reflect greater use of digital channels for high-value transactions, migration from one payment platform to another, changing consumer behaviour or a combination of these factors.
What is clear from the CBN data is that Nigeria’s payment economy is becoming increasingly digital but also increasingly differentiated.
Mobile payments are expanding rapidly, instant payments are handling larger values, ATM withdrawals remain significant, while POS and cheque transactions are losing ground. Web Pay continues to account for a substantial share of activity despite recording declines.
The emerging pattern suggests that the next phase of Nigeria’s payment revolution will be defined less by the simple growth of electronic transactions and more by the quality, value, security and accessibility of the transactions being processed.
For banks, fintech companies, payment service providers and regulators, the challenge will be to adapt to these changing patterns while ensuring that Nigeria’s payment infrastructure remains reliable, inclusive and secure.
The first-quarter figures have therefore offered a revealing snapshot of an economy where digital finance continues to expand, but not necessarily in the way previously expected. Nigerians are moving more money electronically even as the number of transactions declines, signalling a shift towards a payment system increasingly shaped by transaction value, channel preference and digital convenience.
As the year progresses, sustained monitoring of these trends will be necessary to determine whether the first-quarter divergence represents a temporary adjustment or the beginning of a more fundamental change in how Nigerians conduct financial transactions.
