By Daniel Oluwatobiloba Popoola
The Central Bank of Nigeria (CBN) has disclosed that digital payment transactions in the country recorded a 276 per cent increase in volume over the past five years, underscoring rapid adoption of electronic payment channels even as cash remains critical to economic activity.
The disclosure was made on Friday, 23 January, 2026 at the Committee on Bank Operations (CBO) Annual Conference, where the CBN Governor, Olayemi Cardoso, delivered the keynote address through his Special Adviser, Fatai Kareem.
Addressing participants, Cardoso said Nigeria’s payment ecosystem has evolved significantly, stressing that digital innovation and physical cash must coexist rather than compete.
He noted that while electronic payments enhance transparency, efficiency and inclusion, cash continues to play a vital role, particularly in informal markets, rural communities and among vulnerable populations.
Data presented at the conference showed that the value of digital payment transactions rose by 581 per cent over the same five-year period.
According to the apex bank, the figures reflect rising consumer confidence, sustained policy reforms and technological innovation across the financial system.
However, the CBN emphasised that cash usage has not declined. Currency in circulation increased from about N2.4 trillion in 2020 to approximately N5.1 trillion in 2025, while total currency in circulation grew by 4.6 per cent year-on-year as of December 2025.
Explaining the trend, Cardoso said cash availability depends not only on currency issuance but also on logistics, infrastructure, incentives and effective coordination among financial institutions.
He warned that challenges such as ATM outages and cash illiquidity undermine public confidence and place pressure on the payment system.
He added that banks must play a central role by investing in technology, collaborating with regulators, improving cash deposit mobilisation, strengthening fraud prevention and enhancing digital platforms.
According to him, properly governed electronic payment channels complement cash by easing pressure on physical currency management and providing alternatives during periods of operational stress.
He said Nigeria’s challenge is not choosing between cash and digital payments but ensuring citizens can access cash when needed while building trust in electronic channels.
“In the end, progress is not measured by how quickly technology is adopted, but by how effectively systems improve lives, reduce friction and expand productivity,” Cardoso said, adding that achieving balance requires coherent policy, strong oversight and close industry coordination.
Earlier, the First Vice Chairman of the CBO, Tolulope Ogundipe, who represented the Chairman, Abraham Aziegbe, described Nigeria’s financial system as being at a defining crossroads shaped by rapid digital innovation and the enduring relevance of physical cash.
Ogundipe said while electronic payments are surging, cash remains deeply embedded in daily transactions.
He cited figures from the Nigeria Inter-Bank Settlement System showing that ATM withdrawals reached N36.34 trillion in the first half of 2025, up from N12.21 trillion in the same period of 2024, attributing the spike partly to infrastructure challenges and system outages.
Meanwhile, the Managing Director and Chief Executive Officer of Bankers Warehouse Plc warned about the high volume of cash circulating outside the banking system, describing it as a growing concern.
He said trust deficits, infrastructure gaps and power challenges have led to cash leaving the banking system without returning, thereby weakening transaction velocity and complicating monetary policy implementation.
He added that the situation makes it difficult to determine the volume of authentic cash in circulation, calling for urgent collective action to address the challenge.
