According to a statement from the Nigerian Inter-Bank Settlement System, electronic transaction costs for NIBSS Instant Payment would decrease from ₦5.00 to ₦3.75k starting July 1, 2023.
The central payment platform noted that the reduction was to align with its plan to promote financial inclusion and support innovation in the financial industry in a release that was signed by the Managing Director/Chief Executive Officer, Premier Oiwoh, and the Executive Director, Business Development, Ngover Ihyembe-Nwankwo.
Part of the announcement read “We are delighted to inform you that the board and management of Nigeria Inter-Bank Settlement Plc has approved a further reduction in the transaction processing fees on NIBSS Instant Payment from ₦5 to ₦3.75k effective July 1, 2023.
“In line with our commitment to drive financial inclusion and support innovation, we are also embarking on a volume-driven discount regime to complement this fee reduction and further details will be communicated in due course.”
However, experts have stated that because most banks won’t duplicate the cut in their prices, the reduction in processing fees may not actually alter the bank charges that clients pay.
The banks’ income from fees and commissions from financial transactions has been highlighted to be a significant source of income; for this reason, they can decide against adopting the NIBSS charge reduction.
Four banks collectively earned ₦607.6 billion in fees and commissions in 2022.
Unless the Central Bank of Nigeria, CBN, pushes them to do so, the majority of banks may find it difficult to follow suit with the charge reduction, according to individuals familiar with the issue.
Currently, transactions under ₦5,000 are subject to a processing cost of ₦10, those between ₦5,000 and ₦50,000 are subject to a processing fee of ₦26, and those over ₦50,000 are subject to a processing fee of ₦50.
The decline in the NIBSS processing charge coincides with an increase in the volume of electronic transactions as a result of the platform’s unexpected increase in usage as a result of the CBN’s unsuccessful naira redesign program, which led many Nigerians to switch to cashless transactions.
Cashless transactions increased by 44.84% from ₦87.49 trillion in Q1 2022 to ₦126.73 trillion in Q1 2023 as a result of this trend.
