Tier-1 banks process N286tn in mobile transactions as fintech edge narrows

The growth builds on strong momentum recorded in previous years, when mobile banking adoption accelerated but was still largely constrained by system failures and inconsistent service quality across traditional bank platforms.

The surge in 2025 was driven by Guaranty Trust Holding Company Plc (GTCO), United Bank for Africa (UBA), Zenith Bank and First Bank of Nigeria, all of which have aggressively modernised their digital infrastructure since 2023.

GTCO processed N72.4 trillion in mobile transactions in 2025, up 7.89 percent from 2024, when volumes stood at roughly N67.1 trillion. The bank’s pay-with-transfer transactions, which have become a key growth driver, jumped more than 78-fold year-on-year to N10.4 trillion.

“Pay-with-transfer volumes continue to increase, reflecting strong user adoption driven by speed and convenience, positioning it as one of the fastest-growing payment methods,” the bank said in its investor materials.

UBA’s mobile banking transaction value rose sharply to N51.65 trillion in 2025, representing a 93.09 percent increase compared to 2023 levels, highlighting the rapid acceleration over a two-year period. Similarly, Zenith Bank recorded N104.14 trillion in mobile transactions, more than doubling its volumes with a 107.53 percent increase over the same timeframe.

For First Bank of Nigeria, mobile transactions reached N58 trillion in the first nine months of 2025 alone, compared to the full-year 2024 figure, reflecting a 26.09 percent year-on-year growth and suggesting an even stronger full-year performance.

Collectively, the four banks held N79.72 trillion in customer deposits at the end of 2025, compared to lower balances in prior years, indicating that more customer activity is now happening within bank-owned digital channels rather than being diverted to fintech platforms.

From fintech dominance to bank resurgence

The latest figures mark a turning point in Nigeria’s payments ecosystem. Between 2020 and 2023, fintech apps gained widespread popularity as bank platforms struggled with frequent downtimes, failed transactions and slow processing speeds.

During that period, customers typically maintained deposits with banks but relied heavily on fintech platforms for daily transfers and payments due to their superior reliability and speed.

According to the 2025 KPMG West Africa Banking Industry Customer Experience Survey, which polled more than 35,000 retail customers across Nigeria and Ghana, mobile-first fintechs still dominate customer satisfaction rankings, exposing a persistent gap in user experience.

OPay ranked highest with an 80.7 percent score, driven by seamless instant transfers, strong app reliability and user-friendly features that reduce friction in everyday transactions. The top five fintechs were tightly clustered between 79.0 percent and 80.7 percent, highlighting intense competition at the top.

In contrast, leading traditional banks scored in the mid-to-high 70s, trailing fintechs by several percentage points. The gap, while narrowing, shows that customers increasingly expect bank platforms to match the simplicity and speed delivered by fintech apps.

That dynamic is now reversing.

Heavy tech investments drive change

To regain lost ground, the banks embarked on large-scale digital transformation programmes. Since 2024, GTCO, UBA and Zenith Bank have collectively invested about N415.36 billion in core banking systems and infrastructure upgrades.

These included major system migrations such as GTBank’s transition to Infosys’ Finacle platform and Zenith Bank’s move to Finastra’s Flexcube. While these upgrades initially led to temporary service disruptions, they have significantly improved processing speed, uptime and transaction success rates.

The benefits are already evident in financial performance. Digital channels have become a major revenue source, with GTCO generating N121.29 billion in e-banking income, First Bank N167.92 billion, UBA N461.94 billion and Zenith Bank N169.18 billion in the review period, figures that have grown steadily from prior years as adoption deepens.

Across the broader ecosystem, transaction volumes have also expanded rapidly. According to the Nigeria Inter-Bank Settlement System (NIBSS), instant payments surged 78.3 percent to N1.07 quadrillion in 2024, up from significantly lower levels in earlier years, and reached N284.99 trillion in the first quarter of 2025 alone.

Nigeria has also recorded one of the sharpest global declines in cash usage, dropping 59 percent between 2014 and 2024, reflecting a steady long-term shift toward digital payments.

For customers, the improvements mean fewer failed transactions and less need to rely on multiple apps. Banks are increasingly matching fintechs on speed and reliability, simplifying everyday banking.

As a result, competition is shifting away from basic transfers toward pricing, lending, savings products and customer rewards.

A senior banking executive at one of the tier-1 lenders said improved system stability has boosted customer confidence and increased transaction volumes within bank platforms.

“Our focus remains on delivering seamless digital experiences while deepening relationships through value-added services,” the executive said.

For fintech companies, however, the shift presents new challenges. Their rapid rise was largely driven by gaps in banking infrastructure, gaps that are now closing.

Analysts say fintechs will need to evolve beyond payments by strengthening customer support, improving dispute resolution and expanding into services such as lending and wealth management.

Regulatory changes are also reshaping the landscape. The Central Bank of Nigeria is pushing leading fintechs to obtain National Microfinance Bank licences, bringing them under stricter supervision and increasing compliance requirements.

A more mature payments market

As the gap between banks and fintechs narrows, payments are increasingly becoming commoditised. The ability to process transactions reliably is no longer a key differentiator.

Instead, future competition will be defined by the range and quality of services built around payments.

For consumers, this could lead to better pricing and more innovative offerings. For providers, it signals a more intense fight for customer loyalty and wallet share.

The trend reflects Nigeria’s broader transition toward a digital-first financial system, driven by a young, tech-savvy population and sustained financial inclusion efforts.

However, challenges remain, including infrastructure gaps in rural areas and rising cybersecurity risks as transaction volumes grow.

With tier-1 banks now regaining their footing, Nigeria’s payments ecosystem is entering a new phase, one where reliability is expected, and long-term success will depend on innovation, trust and customer value.