Omolabake Fasogbon
As the push for ‘tap-to-pay’, also known as contactless payment intensifies in the Nigerian financial landscape, consumers, increasingly, must guard against impulsive spending which this innovation will likely encourage.
While this payment method is still far from the mainstream, experts say adoption and prospects in the country are high, given Nigeria’s transaction volume and depth of financial inclusion.
As of 2025, the Central Bank of Nigeria (CBN) reported that over 12 million contactless cashless cards were in circulation. There have been further developments around this following the CBN’s declaration, including its recently launched Payments System Vision 2028 envisaging wider deployment of contactless technologies.
Just this October, Interswitch and its banking partners deepened the push toward contactless payment penetration, with moves to expand supporting infrastructure.
Payment convenience comes as a unique strength of this method. Inherent in this strength, however, is also the greatest threat to household pockets, clearing the need for a mindset of discipline among both current and future users.
Contactless payment is deemed a landmark progress in Nigeria’s digital payment landscape, which is still plagued by network issues, fraud risks, and erratic power supply.
Evolving from cash, card, and bank transfers, this payment method works without physical contact between a payment tool and a merchant’s machine. Users simply use their contactless card, phone, or wearable near a terminal, and payment details are sent over the air using radio waves through NFC. This allows two close devices to exchange data instantly.
This innovation has been tested to reduce the friction associated with conventional bank transfers. Indeed, it is expected to broaden use of contactless transactions, including in transportation and everyday shopping.
While it holds huge benefits for both consumers and businesses, experts stress that its ease of use could expose users to overspending, kind of weakening the psychological restraints that help consumers control spending.
This has been proven in early-adopter countries, where the technology is now mainstream.
Researchers Marie-Claire Broekhoff and Carin van der Cruijsen in a paper titled, “Paying in a Blink of an Eye: It Hurts Less, but You Spend More,” published in the Journal of Economic Behavior & Organisation, examined survey data from Dutch consumers and found that electronic payments were associated with less perceived pain of paying than cash, particularly contactless payments.
The study also found that consumers perceived cash as more helpful in preventing overspending, while contactless payments were considered the least helpful in that regard.
Of concern too is that consumers could lose track of their spending. While this is a general risk across digital payment methods, the speed and convenience of contactless payments are said to make users more tempted.
A 2018 UK survey commissioned by GoCompare reinforced this. It found that 17 per cent of contactless payment users admitted to losing track of their spending, while 13 per cent were worried that the method encouraged them to spend more than they should.
Economists argue that paying with cash often triggers a consciousness of how much is being spent, but tapping a phone may feel less noticeable. They note that when spending feels less painful, consumers may be less likely to think twice before making purchases they do not necessarily need, consequently eating into their budgets.
Financial analyst, Dr. Titi Fowokan, said this is particularly of people who live flamboyantly and have no control over their lifestyle appetite.
“Their spending pattern may increase due to a lack of self-control. With the state of the economy, everyone needs to adjust his or her lifestyle, and this requires self-determination,” she stated.
Incidentally, the Central Bank of Nigeria’s daily contactless payment limits, set at N15,000 per transaction and N50,000 cumulatively to protect users from fraud may also be serving as a buffer against impulse spending.
Consumers are thus advised not to get carried away by the ease brought by the innovation. Safeguards against this include constantly checking account balances, setting weekly spending limits, and making living within one’s means sacrosanct.