Nigeria’s payment landscape is undergoing a transformation, with bank transfers rapidly emerging as the preferred method for digital payments. At a well-attended event on Monday, March 24, 2025, Paystack announced the official launch of Zap, its consumer-facing product designed to enable speedy bank transfers for users. 

“Zap isn’t trying to be a neobank; it is focused on just one thing — bank transfers, fast. Making payments [as] fast, reliable, and effortless as they should be,” Shola Akinlade, CEO and Co-founder of Paystack, said.

With Zap, Paystack validates the growing trend of transfers as the prevalent payment for Nigerians. In 2023, the nine-year-old startup revealed that transfers were customers’ most popular payment channel, making up 58% of payments powered by the startup. 

Similarly, Flutterwave’s 2024 report noted that 51.77% of payments made in Nigeria were completed via transfers, while data from the Central Bank of Nigeria shows Internet transfers as the leading payment channel in terms of volume (51.91%) and value (52.95%).

A look at the payment behaviours in other countries across Africa further highlights this shift, as transfers make up less than 2% of payments in countries like South Africa, Ghana, Kenya, and Uganda, according to data from Paystack. 

So, what’s driving this trend, and how did transfers become Nigeria’s payment darling? 

According to Adedeji Olowe, CEO of lending startup Lendsqr, understanding why cards lost favour with Nigerians is key to grasping the appeal of bank transfers.

The first problem he identifies is the cost of getting a card in Nigeria. When I got my first debit card, I was charged ₦800, a fee I willingly paid, perhaps because I had no cheaper alternative and because it allowed me to make withdrawals wherever I was. 

However, that’s not the case for many Nigerians, with just 35.5% of those over 18 owning a debit card. Today, obtaining a debit card in Nigeria can be costly, with fees reaching up to ₦2,500 when delivery charges are included. 

Additionally, many users experience wear and tear on their cards, leading to difficulties in online transactions. With most Nigerian financial institutions requiring customers to walk into banking halls to get a new card, many are understandably reluctant to replace these cards. 

“Most people remember their PIN, but when it comes to online payments, they put it into ATMs so much [that] the numbers have peeled off and the quality of [the] card itself is not good enough,” Olowe notes. “Therefore, they have a card that can work on ATMs or POS, but they can’t see the card details. If you can’t see your card details, you can’t use it online.”

Additionally, many banks do not automatically configure their cards for online payments, presenting a hurdle for users. 

The rise of virtual accounts has also contributed to the popularity of bank transfers. These unique account numbers tied to transactions allow businesses, especially smaller ones, to receive payments seamlessly without the need for physical point-of-sale (POS) terminals.  

Yvonne-Faith Elaigwu, Head of Operations at OnePipe, acknowledges the decline in card usage in Nigeria but argues that the growth in bank transfers is not solely a reaction to the shortcomings of card payments.

“It seems to me that it’s the evolution of payments, like transfer is the next step in the evolution of payments from cards,” she says.  

However, she adds that users perceive bank transfers as offering enhanced security. Many Nigerians remain cautious about using their cards for online payments due to the increasing threat of payment fraud. In contrast, transfers are perceived as safer since customers don’t have to share personal information that could make them vulnerable to fraud.

The complexity of resolving card transactions adds an additional layer of difficulty that many users prefer to avoid. Bank transfers typically involve three parties, while card payments require four or more parties. 

Though it’s only one extra party, this additional involvement can complicate matters when payments fail or when businesses need to settle transactions. 

Despite this growth and an expectation that card usage will continue to decline, Elaigwu does not expect transfers to kill cards. Instead, she expects card infrastructure providers to step up and address existing challenges to enhance the user experience. 

“It won’t kill them. Fintechs are sprouting up every day, but banks are not dying. I believe they will position themselves to fix some of the issues that are making people abandon cards,” she says.