Nigeria’s financial sector is flourishing. It’s crucial to recognise that the financial transactions system’s issues are being addressed.
Financial organizations and their clients struggle with unsuccessful transactions, although improvements are being made.
There are always ways to fix failed transactions, which can be frustrating and costly. Individuals and businesses can overcome these hurdles and grow with the correct help and tools.
According to the report’s industry sources, up to 60% of unsuccessful transactions were settled, leaving only 40% of them unresolved.
The CBN’s naira redesign policy pushed digital transactions to all-time highs, although compared to the volume of transactions in Q1 2023, the resolutions of failed transactions have continued to decline.
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Why do financial transactions fail?
According to data provided by the Central Bank of Nigeria (CBN), their initiative to redesign high-denomination money resulted in the removal of 2.3 trillion Naira from circulation between October 2022 and February 2023.
Nigerians signed up for digital and electronic banking services as a result of the lack of currency, which gradually led to a move away from a cash-based economy.
In this regard, mobile banking transactions more than doubled between October 2022, when the CBN first stated its plan to change the currency, and the end of February 2023.
Mobile banking transactions increased from 1.1 trillion to 2.6 trillion in one year. Point-of-sale (POS) terminal transactions reached historic highs, as did the number of terminals deployed nationwide.
The Chief Operating Officer of the FinTech Association of Nigeria stated in a statement that “the cash crisis would definitely reaffirm the need for everyone to register on a digital platform and increase financial inclusion in the rural areas.”
The value of NIBSS Instant Payment (NIP) transactions, which fell to about 36.8 trillion in February, rose to 48.3 trillion by March after being 39 billion in January.
According to NIBSS, PoS transaction volume jumped from 113.53 million in February to 177.93 million in March, and value rose from 883.4 billion to 1.152 trillion, a 30.41% increase.
The first quarter’s unresolved unsuccessful e-payment transactions surged with this wave. Because of this, social media is filled with curses and concerns about Nigeria’s cashless economy. Failed transactions are a frequent topic in Nigeria.
Elvis Christopher, Product Partnerships Executive, calls this the largest difficulty since the naira redesign policy and the migration to digital and alternative media. Auto-reversal has reduced this issue for most institutions; however, platform stability can be improved.
“Customer service representatives at various institutions have bitterly complained about the rise in failed transaction complaints. Tier1 banks had to lodge personnel overnight and work extra hours to minimize their failed transaction backlog. efforts without results. Customers distrust the 2–5 days it takes to resolve refused transactions.
Nigeria’s financial sector is flourishing. It’s crucial to recognise that the financial system’s issues are being addressed. Financial organizations and their clients struggle with unsuccessful transactions, although improvements are being made. There are always ways to fix failed transactions, which can be frustrating and costly. Individuals and businesses can overcome these hurdles and grow with the correct help and tools.
According to the report’s industry sources, up to 60% of unsuccessful transactions were settled, leaving only 40% of them unresolved.
The CBN’s naira redesign policy pushed digital transactions to all-time highs, although compared to the volume of transactions in Q1 2023, the resolutions of failed transactions have continued to decline.
Why do transactions fail?
According to data provided by the Central Bank of Nigeria (CBN), their initiative to redesign high-denomination money resulted in the removal of 2.3 trillion Naira from circulation between October 2022 and February 2023.
Nigerians signed up for digital and electronic banking services as a result of the lack of currency, which gradually led to a move away from a cash-based economy.
In this regard, mobile banking transactions more than doubled between October 2022, when the CBN first stated its plan to change the currency, and the end of February 2023.
Mobile banking transactions increased from 1.1 trillion to 2.6 trillion in one year. Point-of-sale (POS) terminal transactions reached historic highs, as did the number of terminals deployed nationwide.
The Chief Operating Officer of the FinTech Association of Nigeria stated in a statement that “the cash crisis would definitely reaffirm the need for everyone to register on a digital platform and increase financial inclusion in the rural areas.”
The value of NIBSS Instant Payment (NIP) transactions, which fell to about 36.8 trillion in February, rose to 48.3 trillion by March after being 39 billion in January.
According to NIBSS, PoS transaction volume jumped from 113.53 million in February to 177.93 million in March, and value rose from 883.4 billion to 1.152 trillion, a 30.41% increase.
The first quarter’s unresolved unsuccessful e-payment transactions surged with this wave. Because of this, social media is filled with curses and concerns about Nigeria’s cashless economy. Failed transactions are a frequent topic in Nigeria.
Elvis Christopher, Product Partnerships Executive, calls this the largest difficulty since the naira redesign policy and the migration to digital and alternative media. Auto-reversal has reduced this issue for most institutions; however, platform stability can be improved.
“Customer service representatives at various institutions have bitterly complained about the rise in failed transaction complaints. Tier1 banks had to lodge personnel overnight and work extra hours to minimize their failed transaction backlog. Efforts without results. Customers distrust the 2–5 days it takes to resolve refused transactions.
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Common transaction failures
Insufficient funds occur when someone tries to make a transaction, but their account isn’t funded enough to cover the cost. If this happens, the transaction will probably fail because they did not wait to confirm when they expected the payments.
Network issues are particularly common with electronic transactions, such as ATM or mobile banking transactions, requiring a reliable network connection. Poor network connectivity, downtime, or system maintenance can cause a transaction to fail.
When someone gives false or inadequate information during a transaction, it is another major reason for unsuccessful transactions in Nigeria. The financial institution or service provider may decline the transaction as a result, which may be the result of an error or oversight.
Nigerian transactions often fail due to fraud or insufficient information. Errors or oversights may cause the financial institution or service provider to deny the transaction.
System malfunctions or service provider software or hardware difficulties cause technical problems. Incompatible or outdated devices, software, and browsers can cause technical issues.