Why Nigeria Lags in NFC Adoption Amid Fintech Growth – Morgan Nwaiku

Despite Nigeria’s thriving digital economy, experts like Morgan Nwaiku warn that the country risks missing out on the full benefits of financial technology due to the slow adoption of Near Field Communication (NFC). While mobile transactions in Nigeria reached ₦5.4 trillion in 2020, and smartphone penetration stood at 42% in 2021, NFC technology remains underutilized, leaving the nation behind global counterparts such as China, Kenya, and the UK.

NFC, a short-range wireless technology that enables contactless data exchange, has revolutionized payments and urban mobility worldwide. It underpins London’s Oyster cards, Kenya’s BebaPay transit system, and China’s WeChat Pay, reducing reliance on cash and enhancing efficiency. Yet in Nigeria, cash remains dominant, accounting for 85% of transactions as of Q3 2023, despite efforts by the Central Bank of Nigeria (CBN) to promote a cashless economy.
Morgan Nwaiku, a digital technology strategist, sees this as a critical gap. “NFC isn’t just about faster payments,” he said. “It’s about building an interconnected ecosystem that is secure, efficient, and inclusive. Imagine Lagos commuters tapping NFC-enabled cards at bus stops, farmers verifying fertilizers with a phone scan, or hospitals eliminating patient misidentification. This is the future Nigeria must seize.”

He further went on to state “Local innovators are already laying the groundwork. FinTech’s in Nigeria can pilot NFC-enabled solutions for informal markets, allowing street vendors in Lagos to accept payments via NFC stickers linked to mobile wallets—bypassing costly hardware”.

Morgan highlights several areas where NFC could have a transformative impact. In financial services, NFC could deepen financial inclusion by allowing rural traders to accept payments using low-cost NFC tags, bypassing the need for expensive point-of-sale (POS) terminals. Additionally, tokenization, a security feature that replaces card details with unique codes, could help curb fraud in Nigeria’s digital payments landscape. However, cybersecurity risks remain. “Phishing scams targeting NFC users could emerge,” warns Morgan, “Regulators must mandate encryption standards and real-time transaction alerts to build trust.”

In urban mobility, Lagos—home to around 15 million people—loses an estimated ₦4 trillion annually to traffic congestion, according to 2023 data from the Lagos State Government. NFC-based ticketing, similar to Nairobi’s BebaPay, could streamline transit systems by reducing boarding times at crowded bus stops and improving economic productivity. A proposed public-private pilot in Abuja or Port Harcourt, discussed at the October 2023 National Fintech Summit, aims to equip 10,000 traders with NFC tags and subsidize POS upgrades. Lessons from India’s UPI rollout, which began in 2016, show such models can drive adoption.
This technology could also combat counterfeits. With 20% of agrochemicals in Nigeria reported as fake in a 2023 NAFDAC study, NFC tags on product packaging could allow farmers and pharmacists to verify authenticity instantly.

Morgan emphasized that “hospitals could adopt NFC wristbands linked to digital medical records, minimizing diagnostic errors. Beyond commerce, reusable NFC-enabled packaging trials in Lagos markets, reported in September 2023, aim to reduce waste and track perishable goods.

However, adoption faces significant hurdles. A Q3 2023 survey by TechCabal revealed that 68% of Nigerians are unfamiliar with NFC, and less than 15% of POS terminals in the country currently support it. Regulatory fragmentation between the CBN, the Nigerian Communications Commission (NCC), and the National Information Technology Development Agency (NITDA) further complicates efforts to implement a cohesive policy. Current CBN guidelines, updated in August 2023, lack provisions for NFC-based micropayments, stifling use cases for low-income users.

“Harmonizing regulations with the NCC’s SIM card infrastructure policies could unlock rural adoption”, Morgan stated.
“The chicken-and-egg problem persists,” Morgan noted. “Merchants won’t invest in NFC terminals without consumer demand, and users won’t adopt it without widespread merchant acceptance.”
To overcome these challenges, Morgan advocates a multi-stakeholder approach. Suggestions include embedding NFC wallets into popular apps like Opay and Kuda, which surpassed 40 million users in 2023, providing tax incentives for small businesses adopting NFC terminals, and launching NCC-backed public awareness campaigns through social media and grassroots workshops. With 70% of Nigerians under 30, social media campaigns targeting tech-savvy youth, such as a viral NFC demo trend, could accelerate cultural adoption. NFC adoption offers a pathway to strengthen Nigeria’s position in Africa’s digital economy.

“Kenya’s success with M-Pesa shows how leapfrogging legacy systems can position nations as innovators”. NFC offers Nigeria a similar chance to lead—but only if stakeholders act decisively. As Nigerian fintech firms like Flutterwave and Interswitch expand globally, integrating NFC could amplify their impact by enabling seamless cross-border payments.

For policymakers, the message is clear: “NFC adoption isn’t just a technological upgrade—it’s a strategic investment in economic resilience” Morgan stated.
“The infrastructure gap is surmountable,” Morgan concluded. “With coordinated efforts, Nigeria can harness NFC to meet its digital economy targets. The tools are here, the players are ready. What we need now is the will to act.”