Nigeria Sees Largest Drop in Cash Transactions on Digital Payment Boom
TLDR
- Nigeria has seen the sharpest decline in cash transactions among seven major economies over the past decade
- Cash usage dropped by 59% from 2014 to 2024, according to a report by Worldpay
- The Central Bank of Nigeria’s 2023 naira redesign policy, intended to reduce cash hoarding and money laundering, accelerated the transition
Nigeria has seen the sharpest decline in cash transactions among seven major economies over the past decade, with cash usage dropping by 59% from 2014 to 2024, according to a report by Worldpay. The decline surpasses that of the Philippines (43%), Indonesia (44%), Mexico (41%), Japan (31%), Germany (24%), and Colombia (22%).
The shift comes as digital payments in Nigeria reach record levels, driven by growing fintech-bank partnerships. The report, which examined 40 markets covering 88% of global GDP, projects Nigeria’s cash usage will drop further to 32% by 2030 as electronic payments continue to expand.
The Central Bank of Nigeria’s 2023 naira redesign policy, intended to reduce cash hoarding and money laundering, accelerated the transition, causing a 29.2% drop in currency circulation to ₦982.1 billion ($1.63 billion) in early 2023. Fintech firms like OPay and PalmPay capitalized on the shift, stepping in as traditional banks struggled to handle surging online transactions.
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Key Takeaways
Nigeria's rapid digital transformation underscores its emergence as Africa’s fintech leader. Electronic transaction volume surged 1,514% between 2018 and 2024, reaching 11.3 billion, according to the Nigeria Inter-Bank Settlement System (NIBSS). Financial inclusion also improved from 56% in 2020 to 64% in 2023, with a central bank projection of 80% by 2026. With declining cash reliance, the country is setting a model for digital finance across the continent. The combination of fintech expansion, central bank policies, and increasing smartphone penetration reshapes Nigeria’s payment landscape. However, challenges remain, including infrastructure gaps and regulatory uncertainties. If momentum continues, Nigeria could redefine how financial transactions operate in Africa, bridging the gap between cash-based and fully digital economies.
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