Internet banking overtakes ATM, PoS as transaction values surge to ₦542.98trn

Banking transactions conducted through Web Pay, also known as internet banking, surged to ₦542.98 trillion in the first quarter (Q1) of 2025, reflecting customers’ growing preference for digital channels over Automated Teller Machines (ATMs) and Point of Sale (PoS) terminals.

Data from the Central Bank of Nigeria (CBN) showed that the value of Web Pay transactions reached ₦542.98 trillion in Q1 2025, far exceeding ATM transactions valued at ₦15.97 trillion and PoS transactions worth ₦70.98 trillion during the same period.

“This shows the gradual shift of the Nigerian financial system toward the digital economy,” said Ayokunle Olubunmi, head of Financial Institutions Ratings at Agusto & Co. According to him, the surge underscores the growing impact of financial technology (FinTech) and financial institutions’ initiatives in driving digital payments. He added that the challenges banks faced in keeping cash at the ATMs also contributed to the surge in digital payments.

Year-on-year, Web Pay transaction value grew by 34.2 percent to ₦542.98 trillion in Q1 2025 from ₦404.80 trillion recorded in the corresponding period of 2024. In terms of transaction volume, internet banking recorded 5.49 billion transactions in Q1 2025, representing a 4.18 percent rise compared to 5.73 billion transactions in the same quarter of 2024.

On a month-on-month basis, the value of Web Pay transactions increased by 4.04 percent to ₦180.59 trillion in March 2025 from ₦173.57 trillion in February.

Web Pay transactions first overtook ATM transactions in January 2020, at the onset of the COVID-19 pandemic, when transaction value rose sharply from ₦46.60 billion in December 2019 to ₦35.40 trillion in January 2020. During the same period, ATM transaction value rose from ₦601.93 billion in December 2019 to ₦1.55 trillion in January 2020, while PoS transactions were valued at ₦313.42 billion with a volume of 41,305,041 transactions.

The CBN data also showed that ATM transaction value rose significantly by 193.03 percent to ₦15.97 trillion in Q1 2025 from ₦5.45 trillion in Q1 2024. The volume of ATM transactions increased from 210.65 million in Q1 2024 to 411.42 million in Q1 2025, marking a 95.30 percent rise.

Similarly, PoS transaction value surged by 83.46 percent to ₦70.98 trillion in Q1 2025 from ₦38.69 trillion in the same period of 2024, reflecting continued adoption of digital payment tools despite higher transaction costs.

Commenting on the development, Funmi Adebowale, head of Research at Parthian Securities, said the sharp rise in Web Pay transactions underscores Nigeria’s accelerating transition toward a fully digital payment ecosystem.

“The surge reflects the combined impact of increasing smartphone and internet penetration, as well as rising transaction costs on ATMs and PoS terminals, which have made web-based transfers a more cost-effective and convenient alternative for many users,” she said.

Adebowale recalled that the CBN recently increased transaction fees for ATM withdrawals, particularly for “not-on-us” transactions, those carried out at ATMs belonging to other banks.

The CBN explained that the review of ATM transaction fees was designed to address rising operational costs and enhance efficiency across the banking sector while encouraging the deployment of more ATMs and ensuring fair and transparent charges for customers.

Under the new fee structure, on-us transactions, which are withdrawals at a customer’s own bank’s ATM, attract no charge. Not-on-us transactions, which are withdrawals at another bank’s ATM, now attract a charge of ₦100 per ₦20,000 withdrawal for on-site ATMs, and ₦100 per ₦20,000 withdrawal plus a surcharge of up to ₦500 for off-site ATMs. The surcharge will be displayed on the ATM screen before transaction approval. For international withdrawals, charges will be based on cost recovery, meaning that the exact fee applied by the international acquirer will be passed to the customer.

Analysts believe that the new fee regime, coupled with the convenience and efficiency of digital channels, is likely to further accelerate the migration of customers from cash-based to web-based transactions, solidifying Nigeria’s ongoing transition to a digital economy. (BusinessDay)