Naira scarcity pushes commuters to digital payments, bank transfers

Commuters are now paying transport fares through bank transfers and other digital payment options as the naira note scarcity persists. The crunch is forcing both passengers and drivers to rely on online banking, USSD codes, and payment cards.

Drivers accept transfers, PoS devices

Yetunde Adetola, a commuter from Lekki Phase 1 in Lagos, said some commercial drivers had started accepting transfers. Ayomide Olaniyi, a student, said: "I recently paid bike fare through transfer, and the bike man accepted it."

A video posted on Twitter showed a commercial bus driver holding a PoS device while calling passengers heading to Ketu, Ojota, and Mile 12, letting them know they could pay fares with debit cards. Another video showed a bus conductor pasting a flier urging passengers to pay with Lagos' Cowry Card.

BRT usage rises as Cowry Card price cut takes effect

Since the price of Cowry Card-enabled Bus Rapid Transit (BRT) in Lagos was reduced by 50 percent, many residents have switched from cash to the Cowry Card. Enitan Azeez, a worker living in Ikorodu and commuting to Apapa via BRT, said he started using BRT because he does not have money to pay commercial bus drivers. "With the card, I only need to top up using an app, and this has made transporting within Lagos much easier," he added.

Electronic transactions jump 55 percent

Data from the Nigeria Interbank Settlement System (NIBSS) showed the volume of electronic transactions surged 55 percent in January 2023. NIBSS instant payment transactions increased to 541 million in January 2023 from 348 million in January 2022. NIBSS also revealed that registered mobile users did transactions worth N2.37 trillion in January 2023, a 125 percent increase from the previous year.

CBN cashless policy and withdrawal limits

Godwin Emefiele, governor of the Central Bank of Nigeria, had in October 2022 announced plans to redesign the N200, N500, and N1,000 notes. He said the move would reduce cash in circulation, aid the cashless policy, and reduce occurrences of terrorism and kidnapping. The CBN limited daily cash withdrawal over the counter to N500,000 for individuals and N5 million for corporate organisations. ATM withdrawals were limited to N20,000 per day. Following the deadline for the return of old notes, Nigerians have lamented the unavailability of the new naira notes.

The shift to digital payments for everyday transport fares suggests the naira crunch is speeding up Nigeria's movement toward a cashless economy.