Contactless Payment: The future of Nigerian businesses

The coronavirus pandemic came with several novelties and a renewed consciousness to avoid germs is at the centre of it all. This birthed a lot of the precautionary guidelines including social distancing, mandatory face mask usage and regular temperature check. As expected, businesses have become conscious of upholding these guidelines to protect their customers and staff.

This brings us to the growing reality of Contactless Payment in Nigeria. Although Nigerians are becoming more receptive of this route using mobile banking amongst other options, the pandemic took it to an all-time rise. No one wants to exchange notes that can transfer the coronavirus and with some Point-of-Sale (POS) payments, a level of undesired contact still remains.

Evidently, contactless technology had been in place, but it was not widely embraced until recently. According to data from the Nigerian Inter-Bank Settlement Scheme (NIBSS), mobile payments have increased by 391% since May 2019. As of January 2020, mobile payments topped 7.4million transactions, up from 724,803 in January 2019. Although this is impressive, it is safe to say that contactless payment is still in its teething stages in Nigeria. So, what do we expect to see in the near future of this growing service in Nigeria?

Contactless payment will gradually overtake cash transactions

The pandemic has shown that we can achieve lots of things that seem impossible in Nigeria. People are adapting to the new normal and the technology is so fast-paced that everyone wants to partake. Both old and new tech companies are introducing futuristic solutions that are particularly tailored to the needs of Nigerians. Also, due to covid-19, most people especially us germophobes could care less about physical contact so this further drives the need for contactless payment. This makes it evident that cash payments will be greatly minimized in no time.

Nigerian businesses will adopt the use of enabled POS machines.

While this is already a growing practice in Nigeria, the coronavirus pandemic pushed many other establishments to quickly acquire the enabled POS machines. These machines allow customers to simply wave their smartphones, smartwatches, or even the card itself at the system. The terminal uses near-field communication (NFC), which involves a short-range implementation of Radio-frequency identification (RFID) to automatically read the details of your wallet. By a simple gesture, you can pay and satisfy your Ice Bubble Tea craving. The sheer timeliness and somewhat sophistication is the endearing factor of this option.

Complete Contactless payment will overtake traditional credit card payments

We can all agree that even the traditional ‘contactless’ payment that is common in Nigeria still involves some level of contact. If you head to a grocery store that uses regular POS machines, the attendant will likely help you insert and remove your card. Typing in your card pin also gives room for some level of contact.

Now with Quick Response (QR) code payments and Soft-Pos solutions, direct contact can be avoided. While QR payments involve scan-to-pay technology using QR code readers or supported cameras, Soft POS solutions easily transform smartphones into POS terminals.

In light of the pandemic, contactless payments have increased and will continue to rise long after the pandemic subsides.