Nigeria’s Payment Systems Preparing to Upgrade Infrastructure
Nigeria had an estimated population of 206,139,589 as of the middle of 2020, according to UN data. Based on Worldometer elaboration of the latest UN data, Nigeria had a population of 209,378,644 as of February 21, 2021, with 52.0% living in urban areas, mainly Lagos. The median age of the population is 18.1 years. Nigeria had approximately 104.4 million active internet users as of January 2021, according to Data Reportal.
The low internet, banking, and smartphone penetration rate means Nigeria faces high challenge to establish an e-commerce market. The average annual revenue per paying user in Nigeria amounted to $417 in 2020, according to the PPRO Report. Most cross-border e-commerce purchases by Nigeriaian shoppers are of products from the United Kingdom, Germany, and, the United States.
In 2020, most Nigerian shoppers prefer to pay with cards, followed by cash, bank transfers, and other payment methods. For cashless payments, the three big players are Visa, American Express, and local schemes.
According to IMF data, Nigeria had a gross domestic product of $448.12 billion in 2019, which declined to $442.98 billion in 2020 due to the pandemic. As the economy continues to recover, Nigeria's GDP is expected to expand to about $466.88 billion in 2021.
Internet & mobile phone trends
According to Datareportal, there were 104.4 million internet users in January 2021, which had increased by about 19 million (+22%) from 2020, with an internet penetration rate of 50.0% in January 2021. Meanwhile, 56% of the population had smartphones in 2020.
According to the PPRO Report, only 40% of Nigerians had bank accounts in 2020, and only up to 3% of them were credit card holders.