How eight Nigerian banks earned ₦514bn from digital funds

That is Comply with the Cash, our weekly collection that unpacks the earnings, enterprise, and scaling methods of African fintechs and monetary establishments. A brand new version drops each Monday. 

Banks are historically wired to become profitable from curiosity on loans, treasury payments, and small service expenses. However over the previous few years, expertise has created a brand new, rising income supply: digital funds.

Within the first 9 months of 2025, eight of the nation’s largest banks earned ₦514.82 billion ($356.91 million) from digital funds, a 14.41% soar from the ₦450.02 billion ($311.99 million) in the identical interval of 2024. From being a marginal line merchandise, digital banking earnings is more and more changing into probably the most dependable income streams for conventional banks, fuelled by greater switch volumes, rising dependence on cellular apps, web banking, and card utilization.

The banks—Entry Holdings Plc, Warranty Belief Holding Firm (GTCO) Plc, United Financial institution for Africa (UBA) Plc, Zenith Financial institution Plc, First HoldCo Plc, Wema Financial institution Plc, Stanbic IBTC Holdings Plc, and Sterling Monetary Holdings Firm Plc—noticed their mixed e-payments income rise to ₦514.82 billion ($356.91 million), from ₦450.02 billion ($311.99 million) in the identical interval of 2024, in response to their monetary statements.

UBA reported the best worth of ₦157.51 billion ($109.19 million), adopted by Entry with ₦151.35 billion ($104.93 million). Wema, in the meantime, posted the quickest progress price at 160.32% to ₦24.42 billion ($16.93 million).

The mixed e-payments income of those eight banks accounted for 26.38% of the full ₦1.95 trillion ($1.35 billion) in charges and commissions that banks netted. In the identical interval of 2024, it accounted for 29.03% of the full ₦1.55 trillion ($1.08 billion).

As cashless transactions develop, e-payment commissions have turn into a reliable supply of non-interest earnings for banks. Nigeria recorded a 59% drop in money utilization between 2014 and 2024, outpacing the Philippines, Indonesia, and Germany. This shift has been pushed by growing smartphone penetration, fintech reliability, and regulatory nudges like cashless coverage limits and prompt cost rails.

How banks become profitable from digital funds

In 2024, transactions processed by way of net and cellular channels totalled ₦2.27 quadrillion ($1.57 trillion), a 72.63% rise from ₦1.32 quadrillion ($915.12 billion) in 2023, in response to the Central Financial institution of Nigeria. Within the first quarter of 2025, Nigerians have already moved ₦647.05 trillion ($448.58 billion) by way of these channels.

Banks earn a fee on each switch: ₦10 for transactions under ₦5,000; ₦25 for transfers between ₦5,001 and ₦50,000; and ₦50 for something above ₦50,000.

For example, GTCO, by way of its two digital platforms—GTWorld and GAPS/GAPSLite—processed ₦35.8 trillion ($24.82 billion) in transactions within the first half of 2025. If the typical switch worth was ₦50,000 ($34.66), that may have been 716 million transactions, producing ₦35.80 billion ($24.82 million) in charges at ₦50 per transaction.

This calculation doesn’t embody the federal government’s ₦50 deduction on digital transfers above ₦10,000.

Rising demand and competitors

As the amount of transfers climbs, so does the strain on infrastructure. Switch volumes through net and cellular channels grew 17.57% to 31.76 billion in 2024. To fulfill this, six of those banks spent ₦301.54 billion ($209.05 million) on IT and tech-related companies within the first 9 months of 2025, a 11.39% rise year-on-year.

Whereas these investments are partially demand-driven, they’re additionally a part of banks’ defence mechanism in opposition to fintech.

Fintechs like OPay and PalmPay have reshaped client expectations with comfort and pace. Whereas they processed ₦20.71 trillion ($14.36 billion) in Q1 2025, tiny subsequent to what banks deal with, their numbers characterize a 1,518.64% soar from Q1 2021, signalling their rising reputation amongst Nigerians.

Limits

Regardless of the expansion in digital cost, just one in 4 casual companies says digital funds account for a minimum of 10% of their whole income, in response to Moniepoint’s 2025 Casual Economic system Report.

Most small companies nonetheless function primarily in money. Whereas transfers now account for 39% of their funds, money stays king at 51%. This determine reveals the fact of the nation’s cost growth, with many nonetheless shut out.

Infrastructure gaps are additionally shaping the bounds of the growth.  Six in ten Nigerians stay offline, particularly in rural areas. Solely 39% of individuals in rural areas had smartphones in comparison with 73% in city areas in 2024. A lot of Nigeria’s inhabitants can nonetheless not afford to make a switch. This implies that whereas banks’ e-payment earnings is rising, it’s nowhere close to its peak; an enormous inhabitants remains to be offline.

Nonetheless, as banks money out from transaction volumes, there are considerations about whether or not digital funds are increasing entry or just changing into one other hire assortment system, benefiting banks. Fintechs noticed this hole and lowered charges whereas providing quicker speeds. Banks nonetheless dominate the numbers, however they’re paying consideration. In April 2025, Sterling Financial institution scrapped switch expenses on its OneBank app.

Change price used: ₦1,442.43/$