How money dominance and transfers hinder tap-to-pay in Nigeria
Why contactless payments wrestle to achieve traction in Nigeria
On October 13, CashAfrica announced a partnership with Food Concepts, a quick-service restaurant firm, to introduce cell tap-to-pay throughout Chicken Republic’s greater than 350 shops, as half of its effort to make the fee technique extra extensively adopted in Nigeria.
If you might have taken a Lagos Bus Rapid Transit (BRT) bus, you might have most likely used tap-to-pay know-how. The blue Cowry card, operated by Touch and Pay Technologies (TAP) for Lagos’ transport authority, works throughout town’s street, rail, and ferry networks. TAP says it has greater than 300,000 active users and has processed over 56 million transactions throughout its operations. The cause the system works is that the cardboard and know-how are purpose-built for paying for transportation, and the contactless fee system is built-in into the journey, as commuters are required to faucet to pay earlier than boarding the bus.
It is a place to begin for understanding the problem dealing with contactless payments in Nigeria. The know-how for tap-to-pay is just not new. A contactless fee requires a buyer with a contactless card or near-field communication (NFC)-enabled machine, a service provider with a suitable terminal, and fee infrastructure that connects the transaction to the shopper’s financial institution or fee supplier.
Data from the Nigeria Inter-Bank Settlement System (NIBSS) exhibits that POS terminals processed 1.38 billion transactions value ₦18.32 trillion ($13.5 billion) in 2024. Cash has traditionally dominated how Nigerians pay, nevertheless it has been shrinking. Between 2014 and 2024, money transactions in Nigeria fell by 59%. What changed money transactions was digital payments.
This implies that Nigerians don’t should be satisfied that they will pay digitally, since they already do. What they aren’t but satisfied of is why they need to pay this manner.
We’ve been right here earlier than
CashAfrica’s partnership with Chicken Republic is just not the primary try to make contactless fee a traditional half of the fee course of in Nigeria. In 2015, Unified Payments, a Nigerian payments infrastructure firm, launched PayAttitude with six banks, together with Access Bank, UBA, Zenith Bank, Skye Bank, Diamond Bank, and FirstBank. The NFC-based service allowed prospects to pay by tapping an NFC-enabled tag towards a suitable POS terminal. The tag could possibly be hooked up to a cellphone or carried individually, and transactions had been linked to a pay as you go pockets.
In March 2025, Access Bank launched Tap to Phone with Visa, permitting retailers to just accept contactless card and machine payments straight on NFC-enabled Android telephones and not using a conventional POS terminal.
Each try solved half of the availability drawback, both by making suitable gadgets simpler to distribute or by making service provider acceptance factors simpler to deploy. Still, none created a compelling sufficient cause for shoppers and retailers to alter fee behaviour at scale.
There can be a belief drawback. In a low-trust market like Nigeria, the place shoppers are cautious of fee fraud, eradicating a well-recognized safety step of PIN authentication can create friction about whether or not tapping is protected. Nigeria’s contactless guidelines now put some boundaries round that threat. In 2023, the Central Bank of Nigeria issued guidelines protecting the authentication and threat administration necessities for contactless payments. The guidelines enable transactions of as much as ₦15,000 ($11.28) with out extra verification and a cumulative every day restrict of ₦50,000 ($37.60).
The tap-to-pay technique can be competing with transfers, which have turn out to be a well-recognized fee technique in components of the nation.
By February 2023, because of the naira redesign policy and the ensuing money scarcity, foreign money in circulation fell from ₦3.29 trillion ($2.47 billion) in October 2022 to ₦982.09 billion ($738 million). As Nigerians struggled to entry bodily money, digital payments surged to an all-time excessive of ₦600 trillion ($451 billion) in 2023, a 55% enhance from the earlier 12 months.
The money scarcity compelled Nigerians to search out one other strategy to pay. Circumstances made the choice obligatory, and repeated use made it acquainted, and tap-to-pay has no equal forcing perform. Other fee choices are nonetheless out there, so being sooner alone is just not sufficient. The know-how has to supply a bonus that transfers, playing cards and money don’t, and make the distinction so apparent that buyers and retailers have a cause to change.
What tap-to-pay unlocks
Tap-to-pay can achieve floor inside the already present POS community. NIBSS counted 8.3 million registered PoS terminals as of March 2025, some of which already help NFC. NIBSS can be liable for certifying fee terminals and functions deployed in Nigeria, which creates a standard infrastructure layer throughout the trade. The POS agent who at present handles transfers, processes card transactions, or dispenses money might turn out to be half of the tap-to-pay distribution community. The catch is {that a} terminal can settle for tap-to-pay and nonetheless have prospects who would reasonably make transfers.
Tap-to-pay suits into Nigeria’s cashless coverage agenda. When the CBN launched the coverage, it argued that the nation’s heavy reliance on money was pricey to handle, elevated the chance of theft and cash-related losses, stored cash outdoors the formal monetary system, and restricted the effectiveness of financial coverage.
If tap-to-pay could make digital payments simpler on the level of buy, it might assist shift extra transactions from money to the formal digital financial system, lowering cash-handling prices and income leakage.
The fee technique might additionally normalise extra superior types of authentication throughout payments, together with biometric authentication. Nigerian firms have already experimented with this. Access Bank announced a facial biometric payment system in 2020, whereas Accelerex, a Nigerian fintech, launched Pay with Fingerprint on NIBSS-certified biometric POS gadgets in 2024. However, like earlier contactless makes an attempt, these techniques have had few locations the place shoppers might use them. If tap-to-pay could make contactless authentication half of on a regular basis transactions, it might assist construct shopper belief in the fee technique.
True scale calls for shifting past surface-level integrations to sturdy execution. We’ve filtered the noise out of Moonshot 2026, optimising the convention strictly for high-calibre connections between startup founders, international monetary operators, enterprise leaders and people rewiring Africa’s technical frameworks. Get 20% off Early Bird tickets for a limited time.
