Nigeria's payment ecosystem is growing stronger, reinforced by an innovative approach to competition and an awareness by both established operators and new startups to keep up with market trends.

In a recent presentation of its results, e-payment solution provider etranzact recorded 22% growth in turnover, 124% growth in operating profit and 100% increase in dividend payment to its shareholders.

etranzact founder and CEO Valentine Obi, said "Key to our growth has been a renewed product and customer focus setting key performance indexes around user experience, platform stability and technology development, and we plan to continue doing this."

Segun Adeyemi, co-founder of MEST-incubated company Amplify, a new entrant to the ecosytem, said, "There are a number of factors that have come together to make 2016 a great year for payments. As at December 2015, the value of electronic transactions rose to N48.93 trillion up from N43.85 trillion in 2014, which represents an increase of 11.6 percent. Transaction volume also rose by 43.4 per cent to 162.59 million from 113.42 million in 2014. The Central Bank of Nigeria has also been paying impressive attention to electronic payments and actively promoting policies to stimulate a cashless economy by 2020 because of it obvious benefits."

The introduction of the Bank Verification Number (BVN) is believed to have increased security around online transactions and financial data, encouraging more innovation from payment service providers.

Increasing consumer demand

Adeyemi continues, "As the market continues to mature, different stakeholders are making strategic moves and positioning themselves to gain and/or maintain market share and significance. As more transactions move from cash to digital in Nigeria, the value and volume of such transactions will continue to grow significantly in the coming years."

However, stakeholders warn that increased investment in basic infrastructures is critical to sustainability.

"Also, there need to exist solid political will, trust, security, consumer education, improved legal framework, improved literacy rate, improved power supply and other socio-cultural factors that creates the enabling environment that supports a cashless economy," says Adeyemi.