Digital banking and Nigeria’s economic growth | Dailytrust

Digital banking and Nigeria’s economic growth

Nigeria recorded 3.7 billion real-time transactions in 2021 – ranking 6th in the world’s most developed real-time payment markets – behind India, China, Thailand, Brazil, and South Korea.

 This is why the country’s digital payments revolution is now driving economic growth and financial inclusion at unprecedented levels for the largest African economy, according to the 3rd edition of Prime Time for Real-Time, published recently by ACI Worldwide, in partnership with GlobalData, a leading data and analytics company, and the Centre for Economics and Business Research (CEBR).

The report – tracking real-time payments volumes and growth across 53 countries – includes an economic impact study for the first time, providing a comprehensive view of the economic benefits of real-time payments for consumers, businesses, and the broader economy across 30 countries.

The widespread uptake of new digital and real-time payment services in Nigeria helped unlock $ 3.2 billion of additional economic output in 2021, representing 0.67 % of the country’s GDP.

This means Nigeria ranks in 4th place among the world’s economies realising the maximum economic benefits of real-time payments.

“Nigeria is fast becoming a poster child across Africa for the successful digital transformation of the country’s economy,” Santhosh Rao, Head of Middle East, Africa, and South Asia, ACI Worldwide, said.

Rao added: “Accelerated by the COVID-19 pandemic, Nigerians increasingly expect higher speeds, greater simplicity, and modern thinking from financial service providers. While cash is still being used widely, the shift towards greater adoption of digital and real-time payment services is testament to the success of government regulators in fostering rapid growth in digital openness, particularly payments.”

But digital banks should not be confused with online banking or mobile banking platforms. Neobanks or digital banks have no affiliation with traditional banks. They do not have a banking hall or a physical branch which you can enter. But like their brick-and-mortar counterparts, they offer similar services one would get from a physical bank.

The difference between a digital bank and a physical bank is in the banking process. For digital banks, the entire banking process is online.

In the case of mobile banking or internet banking, these are not the same as digital banking because they are complimentary services offered by traditional banks. They allow users to perform some transactions remotely. Such transactions include payment of electricity or cable bills, fund transfers, and data subscription

Experts said digital banks are now taking Nigeria by storm. Ever since the advent of the first digital bank in 2017, the concept of neobanks or internet-only banks has gained a lot of traction.

ALAT simplifies payments, collections with the New Quick Response (NQR) feature. It is one of Nigeria’s digital banking platforms, which has again raised the bar in service delivery by including a NQR-code-based payments and collections solution to boost convenient and safe financial transactions.

The new feature on ALAT, known as NQR or quick response (QR) is a code-based payment and collections solution that provides fast, easy, secure, reliable, contactless and account-based options to receive and pay for goods and services.

Announcing the new feature in a press statement, the digital bank explained that merchants/business owners/individuals can display the QR codes generated on ALAT to receive payments at their locations for goods and services. 

“Payers/customers select the NQR option on their bank’s mobile application and scan the displayed NQR codes to make payment to the merchant. merchants/business owners and payers get instant notification of payment made,” the bank explained.

The benefits of the NQR on ALAT include simplicity of use, easy setup, zero cost of acquisition, and a seamless merchant onboarding process. Other benefits are super-fast deployment, instant payment and settlement, and fast and secured payment.

On the level of transaction that can be done using the new feature, the bank said transaction limits are determined by the payer’s bank. However, the bank disclosed that transactions below N250 would attract 50 kobo, while those between N25 and N999.99 would be charged N1. 

Transactions ranging between N1000 and N4,999.99 will attract N5, just as those between N5000 and above would pay the applicable fee of N25. The bank disclosed that the fees payable for the service are the lowest in the industry now.

FG establishes  digital infrastructure across Nigeria  – Galaxy Backbone

Nigeria is creating effective and productive digital infrastructures that will power and propel its digital economy to grow the Gross Domestic Product (GDP), the Galaxy Backbone (GB) has said.

GB’s Managing Director, Prof. Muhammed Bello Abubakar, stated this at the ICTEL expo, according to a statement by the IT agency.

“The digital world was accelerated in 2020 during the pandemic, so today we have a lot of transactions going into billions of dollars beginning and ending across different digital platforms and in that way, a lot of data is being generated. This data has to be securely stored somewhere and backed-up as well to ensure and prevent unforeseen circumstances. Organisations must continue to devise innovative ways to store and back up their data to ensure business continuity’’, the statement signed by the agency’s spokesman, Chidi Okpala, quoted Abubakar as saying.  

He said Galaxy Backbone, the Digital Infrastructure and Shared Services Platform for public and private organisations, is playing an active role in the Digital Transformation journey of Nigeria.

He said: “We are proud of the investment and the work we have done and continued to do in ensuring that the backbone and network infrastructure that is powering Nigeria’s digital economy is secure, available and efficient.

“Our world class Tier III Data Centre and soon to be launched Tier IV Data Centre for Cloud and Disaster Recovery purposes is available for everyone and sometime later today, we will take a deep dive into its huge potential for Nigerian Small & Medium Size businesses, enterprises and the government.’’

 

Dear Reader,
Every day, we work hard to provide readers such as you with the most accurate, up-to-date, and comprehensive information. Quality journalism costs money. Today, we're asking that you support us to do more. Your support means that Daily Trust can keep offering journalism to everyone in the world. Sign up for as little as N1,000 to become a member. Learn more about our membership here

Bank transfers can be made to:
Zenith Bank
1017257739
Media Trust Ltd


Please send details of your bank transfer to the email or Whatsapp number below so that we can contact you.

If you have any questions, please let us know.

Inquiries:
Email: membership@dailytrust.com
Whatsapp: +234 806 990 3410