February 03, (THEWILL) – In a dramatic twist of events, Electronic Money Transfer Levy accelerated by 107.23 percent in December, 2024, to N31.21 billion from N15.06 billion recorded in the preceding month of November.
Compared with the equivalent period of the preceding year, December 2023, the difference is 67.7 percent against the N18.6 billion recorded during the period.
This will result in e-banking revenue boom for the banks as 2024 recorded the highest e-payment transactions in Nigeria’s financial services history.
It is therefore expected that the banks would experience a bountiful harvest od e-banking revenue when their FY 2024 results are published.
THEWILL checks showed that the N31.12 billion EMTL recorded in December 2024, was the highest since the introduction of the policy in August 2021.
The EMTL is levied on transactions conducted via platforms such as mobile money, internet banking, and other electronic payment methods. The Finance Act, 2020 which gave birth to it, further specified the particular rates and circumstances of the Levy, which ensured transparency and consistency in its application.
It applies to all electronic transfers of funds placed in a Nigerian-licensed bank or financial institution. The Levy is imposed as a singular and one-off charge of ₦50 on electronic transfers or electronic receipts of money in the sum of ₦10,000 or more. Transfers under ₦10,000 and between accounts within the same financial institution are outside of the scope of EMTL.
The process of collecting and remitting the Levy involves financial institutions collecting the Levy on each qualifying electronic transfer and remission is expected to be made to the Federal Inland Revenue Service (FIRS) within the timeframe stipulated.
The Finance Act, 2023 stipulates that revenue accruing by the operation of EMTL shall be distributed to the three tiers of government on the basis of derivation with the federal government receiving 15 percent, states 50 percent and the local governments 35 percent of the EMTL realised.
THEWILL reports that the system has pushed the banks into stiff completion as their e-revenue continues to surge with the Tier-1 banks topping the game.
The e-banking income includes revenue from electronic platforms, such as mobile applications, USSD channels, Internet banking, ATM, PoS as well as other debit and credit card transactions.
Recently, the banks embarked on systems upgrade to expand their e-banking channels for maximum performance and enhanced revenue generation, which have created a stiff competition among them.
The remarkable increase in e-banking revenue of the banks shows the high level of interest in alternative payment systems by bank customers as the CBN pushes for expansion in financial inclusion across the country.
According to Nigeria Inter-Bank Settlement System (NIBSS), e-banking activities through the electronic payment transactions in Nigeria hit an all-time high in 2023 as it rose by 55 per cent to N600 trillion, compared to N387 trillion in 2022.
Also, the total value of point of sale (PoS) transactions for 2023 was N10.73 trillion compared to N8.39 trillion recorded in 2022 indicating a 27.85 per cent increase.
These feed the EMTL whose proceeds are shared by the three tiers of government share every month.
The Nigeria Inter-Bank Settlement System (NBSS) recently reported that electronic payment transactions in Nigeria rose to an all-time high of N1.07 quadrillion in 2024 – a point never witnessed in the nation’s financial services history.
A quadrillion is an equivalent of N1,000 trillions – about $702.6 billion based on the closing exchange rate of N1,535/$1 on December 31, 2024.
According to the data released by NIBSS, the value recorded on the NIBSS Instant Payment (NIP) represents a 79.6 percent increase over the N600 trillion recorded in the preceding year – 2023.
While the e-payment data shows a steady increase throughout the 12 months of the year, the highest value was recorded in December.
THEWILL reports that the countryside witnessed unusually high rate of e-payment transactions during the last festivities following the rapid expansion of fintech firms.
Being a festive period with lots of spending activities, Nigerians spent a total of N115.1 trillion over electronic channels in December 2024 according to the NIBSS data.
The volume of transactions processed by NIBSS for the year also jumped from 9.7 billion in 2023 to 11.2 billion in 2024 represents a 15.5 percent increase in the volume of electronic transactions year on year.
Finance experts believe that the surge in e-payment transactions can be linked to the recent cash crunch experience and the cashless policy of the Central Bank of Nigeria (CBN) limiting the amount of cash that can be withdrawn daily.
The NIBSS Instant Payments (NIP) is an account-number-based, online real-time Inter-Bank payment solution developed in the year 2011 by NIBSS. It is the Nigerian financial industry’s preferred funds transfer platform that guarantees instant value to the beneficiary.
According to NIBSS, over the years, Nigerian banks have exposed NIP through their various channels, that is, internet banking, bank branches, Kiosks, mobile apps, Unstructured Supplementary Service Data (USSD), POS, ATM, among others. to their customers.
The expansion of the Electronic Money Transfer Levy (EMTL) to transactions on fintech platforms pushed the federal government revenue from this source to N31.2 billion in December 2024 – the highest monthly record. It was N15.06 billion in November 2024.
Checks further revealed that while December 2024 FAAC of N1.4 trillion was less than N1.7 trillion disbursed in November 2024, the high EMTL figure showed the aggressive penetration of e-payment system driven by the fintech revolution initiated by the digital fintech firms like the Opay, Moniepoint Palmpay.
Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.
