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Digital Payments: A New Revenue Engine for Nigerian Banks
Historically, banks have relied heavily on interest from loans, government securities, and modest service fees to generate income. However, the rapid advancement of technology has introduced a significant and expanding revenue stream: digital payment services.
In the first three quarters of 2025, Nigeria’s top eight banks collectively earned ₦514.82 billion ($356.91 million) from electronic payment transactions. This marks a 14.41% increase compared to ₦450.02 billion ($311.99 million) recorded during the same period in 2024. What was once a minor contributor to bank revenues has now evolved into a critical and dependable income source, driven by surging transaction volumes, widespread adoption of mobile banking apps, internet banking, and card payments.
Top Performers in E-Payment Revenue for 2025
The banks leading this digital payments surge include Access Holdings Plc, Guaranty Trust Holding Company (GTCO) Plc, United Bank for Africa (UBA) Plc, Zenith Bank Plc, First HoldCo Plc, Wema Bank Plc, Stanbic IBTC Holdings Plc, and Sterling Financial Holdings Company Plc.
Among these, UBA led with ₦157.51 billion ($109.19 million) in e-payment income, closely followed by Access Holdings at ₦151.35 billion ($104.93 million). Wema Bank distinguished itself with the most rapid growth, surging 160.32% to ₦24.42 billion ($16.93 million).
Contribution to Overall Bank Revenue
The combined electronic payment fees from these eight banks represented 26.38% of the total ₦1.95 trillion ($1.35 billion) in fees and commissions earned by Nigerian banks in the first nine months of 2025. This is a slight decline from 29.03% of ₦1.55 trillion ($1.08 billion) in the same period of 2024, reflecting the growing diversification of bank income streams.
Cashless Economy: Driving the Digital Payment Boom
Nigeria’s transition towards a cashless society is accelerating faster than many emerging markets. Between 2014 and 2024, cash usage plummeted by 59%, outstripping declines seen in countries like the Philippines, Indonesia, and Germany. This transformation is propelled by increased smartphone penetration, enhanced fintech reliability, and supportive regulatory frameworks such as cashless policy limits and instant payment systems.
According to the Central Bank of Nigeria, transactions conducted via web and mobile platforms soared to ₦2.27 quadrillion ($1.57 trillion) in 2024, a 72.63% increase from ₦1.32 quadrillion ($915.12 billion) in 2023. In just the first quarter of 2025, Nigerians processed ₦647.05 trillion ($448.58 billion) through these digital channels.
Understanding Transfer Fees
Banks levy fees on electronic transfers based on transaction size: ₦10 for transfers below ₦5,000; ₦25 for amounts between ₦5,001 and ₦50,000; and ₦50 for transfers exceeding ₦50,000. These charges accumulate significantly for frequent users.
Calculate Your Bank Transfer Costs
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Input your weekly transfers above to see your personal share of the ₦514 billion Nigerian banks earned from e-payments in just nine months of 2025.
Case Study: GTCO’s Digital Payment Volume
Guaranty Trust Holding Company (GTCO) processed ₦35.8 trillion ($24.82 billion) in transactions through its digital platforms, GTWorld and GAPS/GAPSLite, during the first half of 2025. Assuming an average transfer value of ₦50,000 ($34.66), this equates to approximately 716 million transactions, generating ₦35.8 billion ($24.82 million) in fees at ₦50 per transaction.
Note that this figure excludes the government’s ₦50 levy on electronic transfers above ₦10,000.
Infrastructure Investments and Competitive Pressures
As digital payment volumes surge, banks face mounting demands on their technological infrastructure. In 2024, web and mobile transfer volumes increased by 17.57% to 31.76 billion transactions. To support this growth, six leading banks invested ₦301.54 billion ($209.05 million) in IT and technology services during the first nine months of 2025, marking an 11.39% year-over-year increase.
These investments not only address rising demand but also serve as a strategic defense against fintech disruptors.
Fintech companies such as OPay and PalmPay have revolutionized customer expectations by offering swift and convenient payment solutions. Although their transaction volumes remain modest compared to banks, processing ₦20.71 trillion ($14.36 billion) in Q1 2025, this represents an explosive 1,518.64% growth since Q1 2021, highlighting their growing footprint in Nigeria’s payments landscape.
Challenges and the Road Ahead
Despite the rapid expansion of electronic payments, cash remains dominant, especially among informal businesses. According to Moniepoint’s 2025 Informal Economy Report, only 25% of informal enterprises report that digital payments constitute at least 10% of their revenue. Cash still accounts for 51% of their transactions, while transfers make up 39%, underscoring the persistent cash dependency in many sectors.
Infrastructure limitations also constrain growth. Approximately 60% of Nigerians remain offline, predominantly in rural regions where only 39% owned smartphones in 2024, compared to 73% in urban areas. This digital divide restricts access to electronic payment services for a significant portion of the population, indicating substantial room for growth in e-payment adoption.
As banks capitalize on transaction fees, questions arise about whether digital payments are genuinely broadening financial inclusion or merely serving as an additional revenue channel for banks. Fintechs have identified this gap by offering lower fees and faster services. In response, banks are adapting; for example, Sterling Bank eliminated transfer fees on its OneBank app in April 2025 to remain competitive.
Exchange rate used: ₦1,442.43 = $1
