According to a recent report by Worldpay, Nigeria has experienced the largest decline in cash usage globally, driven primarily by the rapid expansion of digital transactions and breakthroughs in fintech.
Cash Usage: Down 59% in 10 Years
From 2014 to 2024, cash usage in Nigeria declined by 59%. This represents the largest decline among the seven major economies where physical currency has traditionally dominated. The Philippines recorded a 43% decrease, Indonesia a 44% drop, Mexico a 41% decline, Japan a 31% reduction, Germany a 24% decline, and Colombia a 22% decline.
According to the report, which considered 40 international markets representing 88% of global GDP, the downward trend in cash use in Nigeria will continue. In the short term, it is expected to reach 32% by 2030, as the use of digital payment methods continues to grow.
A Strategy from the Central Bank of Nigeria
The Central Bank of Nigeria’s (CBN) strategy overhaul in 2023 marked a significant shift in Nigeria’s move away from cash. This move was aimed at reducing cash hoarding and combating illegal financial activities. However, it has led to a severe cash shortage. In February 2023, the money supply declined by 29.2%. This is the lowest figure recorded in over a decade.
While traditional banks struggled to handle the growth in online transaction requests, financial technology companies such as OPay and PalmPay emerged as key players. These Fintechs offer efficient and seamless digital payment solutions. These platforms quickly gained momentum, revolutionizing the way financial transactions are conducted in Nigeria.
Mobile Technology as a Growth Driver for Fintechs
“Nigerians are increasingly turning to cashless transactions,” said Uchenna Uzo, a marketing lecturer at Lagos Business School. According to information from the Nigerian Interbank Clearing System (NIBSS), the country is making a notable shift towards digital payments. The number of electronic transactions has exploded, increasing by 1,514.2% from 793 million in 2018 to 11.3 billion in 2024.
Although cash use is still widespread in Nigeria, its prevalence has declined significantly. In 2019, cash payments accounted for 91% of all transactions, a percentage that has now fallen to less than 50%. Nigeria’s financial evolution is largely driven by mobile technology, which facilitates access to banking and digital payment services for millions of individuals. With the rise of e-wallets, fintech platforms, and digital banking options, Nigeria is gradually establishing itself as a major player in the transition to a paperless economy.
