Why Contactless Payments are Growing in Nigeria

In Nigeria, contactless payments are gaining popularity. One significant obstacle for a while was the absence of safe methods for cardholders to authorise payments. However, things are rapidly changing. New collaborations in the fintech sector may hasten the adoption of contactless payments. In contrast to countries like China and Europe, where tap-to-pay is already common, contactless card payments haven’t taken off yet. This step may eventually spark a nationwide surge in tap-to-pay transactions.

Surprisingly, cards rather than smartphones may be driving the Nigerian push for contactless payments. NFC (Near Field Communication) is still not widely supported by smartphones in Nigeria, despite the fact that it is essential for mobile-based contactless payments.

Contactless cards are now a more viable solution because of this gap. Market share is becoming more competitive as more companies use contactless terminals.

The Tap to Phone solution was introduced by Access Bank, the biggest bank in Nigeria in terms of assets, to introduce contactless payments to the typical Nigerian. Using software point-of-sale (softPOS) technology, Tap to Phone allows retailers to utilise their cellphones as point-of-sale terminals by downloading an app. Customers who have cards that support Near Field Communication (NFC) may make withdrawals without inserting them by only bringing them close to the smartphone. 

Paying with the Tap-to-Phone technology is easy and doesn’t require cash or a point-of-sale machine. It functions by converting an Android phone into a terminal for payments. This is how it operates:

On their Android phone, the company owner (merchant) installs an Access Bank app.

The consumer touches the merchant’s phone or their Visa card.

The buyer and seller receive a confirmation as soon as the money is processed.

Nigeria is transitioning to a cashless economy, in which more payments are made digitally and less in cash. This change has been promoted by the Central Bank of Nigeria (CBN) as a way to make payments quicker and safer.

Because they cannot afford PoS equipment, many small companies in Nigeria continue to operate using cash. By making it inexpensive and simple for anybody to take digital payments, the Tap to Phone system addresses this issue.

Although other businesses like Moniepoint, PalmPay, and FCMB have also launched comparable systems, Access Bank’s Tap to Phone stands out because of its ease of use and compatibility with only a smartphone.

Nigeria’s economy depends heavily on small enterprises; therefore, this new method is quite beneficial to them. This is the reason:

No Pricey Equipment: While PoS equipment may be quite expensive, Tap to Phone just needs a smartphone.

Easy to Use: Anyone can quickly learn how to use the app because it is straightforward.

Faster Payments: By just touching their phones or cards, customers may make payments in a matter of seconds. No more waiting for change or counting money.

Safer Transactions: Since there is no currency involved, digital payments lower the possibility of fraud or theft.

Without having to worry about the expense of payment terminals, small companies can expand and service more clients with Tap to Phone.

It is anticipated that the number of Nigerians using smartphones will increase from 40 million in 2023 to 143 million by 2025. This implies that in the upcoming years, technologies like Tap to Phone will become even more popular.

Nigeria will be one step closer to having a completely cashless economy as more individuals use digital payments. Everyone will benefit from faster, safer, and more convenient transactions as a result.

Nigeria is getting closer to a cashless society with its new method. Businesses and consumers will find it simpler as a result, and the economy will expand.

Access Bank has demonstrated its dedication to financial inclusion and innovation in Nigeria once more. Tap to Phone serves as a tool for development and advancement in addition to being a payment method.