A new report from Global audit, tax, and advisory services firm, KPMG, has revealed that weekly ATM usage among Nigerians dropped from 70 per cent in the past few years to 40 per cent in 2023.
The report titled “In Pursuit Value” surveyed customers of Nigerian and Ghanaian banks and curated their experiences during the year 2023.
Findings from the survey showed that ATM usage in Nigeria has witnessed a notable decline due to the regular unavailability of cash in many stations, just as medium digital transactions dropped from the top to outside the top ten in the survey.
“Currently, four in ten customers report weekly ATM usage, a notable decline from the previous seven in ten over the last few years. This decline in ATM us- age coincides with a significant rise in agency banking usage, with six in ten customers frequenting bank agents every week,” the report indicated.
It further notedaccording to the research findings, the rise in agency banking emphasises the continued popularity of cash, underscoring customers’ quest for more readily available cash options, primarily driven by the popularity of bank agents across the nation.
It further noted that payment via digital mediums rose by 52 per cent in 2023 between January and October according to NIBSS data, adding that the spike in digital payments was triggered by the cash crunch occasioned by the CBN’s naira redesign policy in the first quarter of 2023.
“Consequently, digital payments surged, marking a notable 52% increase in total NIBSS Instant Payment (NIP) transactions by October 2023 compared to January of the same year. This was triggered by the Central Bank of Nigeria’s initiative to overhaul the Naira, aiming to regulate cash circulation and reduce reliance on physical currency.”
The report further explained that the rise in digital payment overwhelmed Tier-1 banks with multiple cases of transaction failure but fintechs such as Opay, PalmPay, and Moniepoint rose to the challenge leading to a significant change in customers’ preferences, adding that 58 per cent of respondents switched banks or had reasons to change to fintechs during the period, representing a radical shift from the 15 per cent who switched banks in 2022.
The KPMG report also showed that about 13 per cent of retail banking respondents now rely on fintech for their primary banking needs from the 4 per cent who made the switch in 2022.
