Nigeria has experienced the most significant decline in cash transactions among six cash-reliant economies over the past decade, driven by the rapid adoption of digital payments and increasing partnerships with fintech companies, according to a report by global payment processing firm Worldpay. From 2014 to 2024, cash transactions in Nigeria plummeted by 59%, marking the largest decrease among the seven major economies analyzed. The Philippines followed with a 43% decline, while Indonesia saw a 44% drop, Mexico 41%, Japan 31%, Germany 24%, and Colombia 22%.
This notable decline in cash usage coincides with a surge in electronic transactions in Nigeria, propelled by enhanced collaborations between banks and fintech firms aimed at promoting digital payment solutions. The Worldpay report, which examined 40 markets representing 88% of global GDP, forecasts that cash usage in Nigeria will further decrease to 32% by 2030 as the adoption of digital payments continues to rise.
In 2023, digital payments in Nigeria experienced a significant boost, largely due to the Central Bank of Nigeria’s naira redesign policy, which was intended to curb cash hoarding and combat money laundering. However, this controversial policy resulted in severe cash shortages, leading to a 29.2% reduction in currency circulation, which fell to ₦982.1 billion by February 2023—the lowest level since 2008.
As traditional banks struggled to cope with the surge in online transactions, fintech companies such as OPay and PalmPay capitalized on the situation, providing reliable alternatives for money transfers and bill payments. These fintech firms emerged as the primary beneficiaries of the cash crunch, effectively meeting the growing demand for non-cash transaction solutions.
“Nigerians now have an increasing appetite for non-cash transactions,” remarked Uchenna Uzo, a professor of marketing at Lagos Business School. This shift in consumer behavior is supported by data from the Nigeria Inter-Bank Settlement System (NIBSS), which indicates that the volume of electronic transactions skyrocketed by 16-fold (1,514.2%) between 2018 and 2024, increasing from 793 million to an impressive 11.3 billion transactions.
The Worldpay report also highlighted that while Nigeria continues to be a cash-heavy economy, the proportion of cash transactions has been reduced by more than half, dropping from 91% in 2019. The report noted that “mobile devices are playing a central role in the transformation” of the financial landscape. According to Enhancing Financial Innovation & Access (EFInA), the financial inclusion rate in Nigeria rose to 64% in 2023, up from 56% in 2020. The Central Bank of Nigeria projected that this rate could increase to 80% by 2026.
“Collectively, these innovations streamline payment processes, reduce reliance on cash, and improve the overall efficiency of financial transactions in Nigeria,” stated analysts at Euromonitor International in a recent report. With the support of fintech partnerships and ongoing innovation, Nigeria is rapidly establishing itself as the leading digital finance powerhouse in Africa. If this momentum continues, the country is poised not only to lead the continent in financial inclusion but also to set a blueprint for the future of money across Africa.
