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The revenue accruing to the Federation Accounts Allocation Committee (FAAC) via the Electronic Money Transfer Levy (EMTL) dropped by 17.6 percent from N57.69 billion in Q1 2023 to N49.54 billion in Q3 2024. This is based on data from the National Bureau of Statistics (NBS).
A study of the NBS quarterly reports showed that a total of N25.33 billion was generated from EMTL in January 2023, while N13.8 billion and N12.3 billion were recorded in February and March respectively.
Conversely, a total of N18.60 billion occurred in January 2024, as the following months had little significant impacts of N15,15 billion and N15.79 billion in February and Marh respectively.
The boom recorded in January 2023 could be attributed to the high volume of e-transactions at the peak of the CBN Naira redesign crisis which forced many bank users to patronise alternative payment channels in the midst of severe cash crunch.
Typically, EMTL is levied on transactions conducted via platforms such as mobile money, internet banking, and other electronic payment methods. The Finance Act, 2020 which gave birth to it, further specified the particular rates and circumstances of the Levy, which ensured transparency and consistency in its application.
It applies to all electronic transfers of funds placed in a Nigerian-licensed bank or financial institution. The Levy is imposed as a singular and one-off charge of N50 on electronic transfers or electronic receipts of money in the sum of N10,000 or more. Transfers under N10,000 and between accounts within the same financial institution are outside of the scope of EMTL.
The process of collecting and remitting the Levy involves financial institutions collecting the Levy on each qualifying electronic transfer and remission is expected to be made to the Federal Inland Revenue Service (FIRS) within the timeframe stipulated.
The Finance Act, 2023 stipulates that revenue accruing by the operation of EMTL shall be distributed to the three tiers of government on the basis of derivation with the Federal Government receiving 15 percent State Governments receiving 50 percent and the Local Governments receiving 35 percent of the EMTL realised.
THEWILL reports that the system has pushed the banks into stiff completion as their e-revenue continues to surge with the Tier-1 banks topping the game..
United Bank for Africa (UBA) has maintained the lead in electronic banking (e-banking) revenue among theTier-1 banks, according to data from the FY 2023 and Q1 2024 financial statements of the institutions.
In the Tier-1 category are Access Bank, FirstBank of Nigeria, Guaranty Trust Bank, United Bank for Africa and Zenith Bank.
The e-banking income includes revenue from electronic platforms, such as mobile applications, USSD channels, Internet banking, ATM, PoS as well as other debit and credit card transactions.
The banks have embarked on several avenues to expand their e-banking channels for maximum performance and enhanced revenue generation, which have created a stiff competition among them.
Analysis of the FY 2023 financial statements of the Tier-1 group in their Holco structures, revealed that the Big Five generated a total of N385.85 billion in e-banking revenue as against N277.14 billion in 2022, representing a 40 percent increase.
UBA earned the highest e-banking income among the Tier-1 financial services institutions. The bank generated N125.57 billion in 2023 representing 32.5 percent of the Tier-1 group total income for the year.
By this, Africa’s Global Bank grew its e-banking income by 59 percent when compared with N75.94 billion it earned in 2022 to emerge the first in 2023, followed by Access Bank which recorded N101.61 billion against N59.65 billion in the previous year, accounting for a 70.34 percent rise.
First Bank grew its e-banking income by 20 percent to N66 billion in 2023 from N55 billion in the preceding year, ranking it the third among the Big-Five group. It was followed by Zenith Bank with e-banking revenue of N51.81 billion compared to N45.73 billion in the preceding year, representing a growth of 13.3 percent.
The financial statements of Guaranty Trust Bank revealed that the 34-year-old bank recorded N40.82 billion as e-banking income in 2023, against N31.73 billion in 2022, constituting a 28.6 percent increase.
The Q1 2024 financial statements of the Tier-1 group (excluding FirstBank of Nigeria) amounted to N108.95 billion against N64.32 billion or 70 percent increase and followed the same performance trend by the major banks..
The remarkable increase in e-banking revenue of the banks shows the high level of interest in alternative payment systems by bank customers as the CBN pushes for expansion in financial inclusion across the country.
According to Nigeria Inter-Bank Settlement System (NIBSS), e-banking activities through the electronic payment transactions in Nigeria hit an all-time high in 2023 as it rose by 55 per cent to N600 trillion, compared to N387 trillion in 2022.
Also, the total value of point of sale (PoS) transactions for 2023 was N10.73 trillion compared to N8.39 trillion recorded in 2022 indicating a 27.85 per cent increase.
The data from NIBSS indicated that in March 2023, the volume of e-payment transactions reached an unprecedented peak of 1.17 billion, followed by the 968 million transactions recorded in December.