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Everything You Need to Know About Payment Methods In Nigeria

For a reason, Nigeria is the largest hub in Africa; It’s the home of its biggest economy, population, and city, Lagos. With a young and growing population, Nigeria has the potential to become a global tech hub.

According to McKinsey, Nigeria is home to over 200 standalone fintech companies, plus several fintech solutions offered by banks and mobile network operators. From 2014 to 2019, Nigeria’s fintech ecosystem raised over $600 million in funding, causing the industry to attract $122 million, which is 25% of what the entire African tech industry achieved in 2019, which was $491.6 million. 

In Nigeria, a focused regulatory drive to increase financial inclusion and cashless payments is consolidated to help the fintech sector in the country grow. While cash and mobile money are standard, local credit and debit cards are especially popular with Nigeria’s burgeoning middle class, accounting for more than 29% of total e-commerce sales.

According to Statista, cash is still ruling the economy despite adopting various electronic payment systems.

In Nigeria, the standard payment methods adopted by merchants like restaurants, stores, shops, and business outlets are principally cash and debit cards. However, from a 2021 survey conducted by Statista, we can see that from the highest credit card penetration ranking worldwide to the lowest, of 137 countries, at 124th position is Nigeria. We also see that the percentage of people amongst the Nigerian population with a financial institution account is considerably higher, especially as over 3 per cent of Nigerians have credit cards. 

The above shows that card payments still have a long way to go as their usage is still considerably low, especially in light of the Nigerian economic status – which is quite huge.

Online payments in Nigeria

From another report by Statista, in 2020, some of the popular payment methods were card payments, with about 35% of online retail trade payments being carried out with card payments followed by cash and bank transfer.
Another popular payment alternative was cash-on-delivery, as seen from the data provided by one of the top marketplaces in Nigeria – Jumia. From this data supplied by Jumia, most of the customers that trade on their platform set their preferred means of payment to cash-on-delivery. To do this, all the customers have to do is use the payment account of Jumia and pay through a QR code or SMS.
An alternative payment method that is also popular in Nigeria is E-wallets. They make up over seven per cent of online payments, with popular providers like PayPal and Konga leading the landscape.

Mobile money revolution

Mobile money represents a revolutionary reality in Nigeria and many other African countries. It allows customers to receive, store, and spend money using a mobile phone. The service can be provided by banks, mobile money operators (MNOs), telecom companies, payment service providers, or similar. The service may be used for international money transfers to families, paying utilities, smallholder farmers, providing humanitarian cash assistance, and e-commerce. In 2019, Nigeria counted 15.3 million mobile money customers and 260 thousand mobile money agents enrolled. In the same year, there were 22 licensed mobile money operators (MMOs).

In Nigeria, based on the central bank’s desire to drive financial inclusion with its beneficial regulatory policies, including the revised Know Your Customer (KYC) requirements and other incentives, we can see an increase in payment-based solutions accelerating the growth of payment agents across the country, and indicating that there are opportunities for more growth in the year ahead.

Learn how your business can take control of its payments, FX, and treasury needs here.


McKinsey: Harnessing Nigeria’s fintech potential
Statista: Nigeria – mobile money customers
Statista: Distribution of online payment methods in Nigeria

AZA Finance



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