The Future of Smart Wallets for Cashless Transactions in Nigerian

Published 6 hours ago• 3 minute read

Nigeria’s digital payments landscape is undergoing a profound transformation, with the nation recording the sharpest global decline in cash usage amid rapid fintech innovations. Driven by smartphone penetration and consumer preference for convenience, the prepaid card and digital wallet market in Nigeria is projected to grow from US \$9.20 billion in 2023 to over US \$20 billion by 2028, representing a CAGR of 16.3%.

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The prepaid card segment alone grew at a CAGR of 14.9% between 2019 and 2023, signaling robust consumer uptake of cashless instruments. In 2024, electronic transactions on the Nigeria Inter‑Bank Settlement System (NIBSS) platform reached ₦1.08 quadrillion, a 79% year‑on‑year increase, while monthly transaction volumes climbed to ₦115.12 trillion by December, reflecting broadbased adoption. Financial inclusion metrics have followed suit, rising to 74% as underbanked populations embrace mobile wallets and digital banking. Industry observers credit this surge to user‑friendly apps like Kuda, Paga, and Moniepoint, which simplify peer‑to‑peer transfers, bill payments, and merchant collections.

Key fintech players are embedding near‑field communication (NFC) chips into cards and smartphones, enabling tap‑to‑pay transactions across retail outlets. Closed‑loop transit solutions such as the Cowry card by Touch and Pay saw usage of prepaid travel cards jump by over 290% from 2021 to 2024, showcasing consumer readiness for contactless payments in daily commutes. In early 2025, PalmPay launched a pilot of 1,000 NFC‑enabled POS terminals, aiming to scale to 300,000 devices nationwide by year’s end, while Moniepoint and PalmPay have partnered with Afrigopay Financial Services to issue 5 million AfriGO contactless cards. Beyond NFC, regulators are crafting blockchain and AI frameworks to foster secure, transparent digital wallets, with new data‑protection guidelines expected in 2025 to bolster consumer trust.

Despite momentum, NFC‑capable POS penetration remains uneven, with many merchants operating legacy terminals lacking contactless support, limiting ubiquitous adoption. Inconsistent power supply and internet connectivity, particularly in rural areas, disrupt offline‑enabled NFC transactions and erode user confidence. Concerns about fraud and data privacy persist; surveys show 40% of consumers are wary of digital wallet breaches, underscoring the need for robust tokenization and end‑to‑end encryption. Moreover, cybersecurity experts warn that without comprehensive data‑security protocols, the expanding digital divide could marginalize segments of the population lacking digital literacy. Macroeconomic pressures such as inflation and naira depreciation further strain consumer spending power, affecting transaction volumes and fintech profitability.

The future of smart wallets in Nigeria hinges on coordinated efforts among fintech innovators, regulatory bodies, and infrastructure providers to address technical, educational, and economic barriers (Fintech Magazine)([Fintech Magazine Africa][1]). As the market evolves, scalable NFC deployment, reinforced cybersecurity, and targeted financial‑inclusion initiatives will be critical to realizing a truly cashless economy that benefits all Nigerians.

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This article was first published on 20th May 2025
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chidiogo-akaelu

Chidiogo Shalom Akaelu holds a degree in English and Literary Studies, from the University of Nigeria. She is a freelance writer, editor and founder of Loana Press, a budding online publishing outlet.