Despite the rapid growth of Nigeria’s digital payments ecosystem, lingering concerns around cost and reliability continue to slow widespread adoption, according to Sofia Zab, global chief marketing officer at PalmPay.
Zab, speaking on the barriers still facing consumers and merchants, noted that when the fintech entered the Nigerian market in 2019, users were often deterred by high transaction fees and frequent service failures.
“These issues discouraged many Nigerians from embracing digital payments,” she said.
However, the landscape is shifting rapidly. The Nigerian Payments Report 2024 shows that the total value of online transfers surged from ₦545.03 trillion in 2021 to ₦783.66 trillion in 2022 — a 43.78 percent year-on-year increase.
Transaction volume also rose by 36.26 percent within the same period, climbing from 10.32 trillion to 14.06 trillion. Notably, mobile app transfers more than doubled, growing by 108.84 percent from ₦53.20 trillion in 2021 to ₦111.12 trillion in 2022.
Despite these impressive figures, trust remains a key concern. A Visa-commissioned study revealed that while 98 percent of Nigerian consumers take steps to protect themselves online, 64 percent still feel vulnerable to scams such as phishing.
At the same time, cash remains a dominant payment method. The Worldpay Global Payments Report 2024 projects a 32 percent drop in cash usage by 2030, but it still accounts for a significant share of point-of-sale transactions in 2024.
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In response, fintechs like PalmPay has focused on removing friction from the payment process. The company has invested heavily in backend infrastructure, resulting in a 99.95 percent transaction success rate. It also introduced user-friendly incentives such as zero-rated bank transfers, fee-free bill payments, and cashback rewards to encourage adoption.
“Once users experience the benefits, they don’t want to go back to cash,” Zab said. “The key to changing behaviour is making digital payments more convenient, rewarding and stress-free.”
As adoption grows, consumers are beginning to actively seek out merchants who accept digital payments, driving the shift organically across the retail space.
PalmPay is also addressing infrastructure gaps. In underserved areas where internet connectivity remains a challenge, users can transact through the company’s network of mobile money agents. These agents are equipped with multiple devices and SIM cards across different networks, ensuring continued service even during outages.
“For us, the goal is to meet people where they are, not wait for ideal conditions to emerge,” Zab explained.
