The competition for contactless payments in Nigeria is intensifying as major players position themselves to tap into this payment method. Despite being around for some time, contactless payments have not gained significant traction in the country due to infrastructure limitations, low customer awareness, and adoption challenges.
Access Bank, the largest bank in Nigeria by assets, has introduced a Tap to Phone solution to familiarize Nigerians with contactless payments. This technology utilizes software point-of-sale (softPOS) where merchants can convert their smartphones into POS terminals by downloading an app. Customers with NFC-enabled cards can make payments by simply tapping their cards near the smartphone without the need to swipe them.
Access Bank has previously ventured into contactless payments with QR code capture technology, allowing users to scan QR codes for transactions. The bank’s latest move with softPOS aligns it with competitors like Kuda softPOS, offering similar tap to phone capabilities in their business banking services.
Fintech rivals such as Moniepoint and PalmPay are also actively promoting contactless payments. Moniepoint collaborated with AfriGO to introduce cards, while PalmPay partnered with CashAfrica, a Nigerian contactless payments infrastructure provider, to launch payment terminals. This heightened activity underscores the belief that contactless payments represent the future of financial transactions.
While infrastructural challenges are surmountable, concerns about security pose a significant hurdle. Users worry about maintaining control over their finances if they lose their phones or cards. To address this, the Central Bank of Nigeria has imposed daily transaction limits to mitigate potential losses in case of theft. Implementing security-focused solutions is essential, with a focus on stringent authorization processes to enhance security measures.
With Nigeria’s leading bank entering the fray of contactless payment adoption, it indicates a potential surge in contactless payment usage within Africa’s largest economy.