Fintech companies in Nigeria generate ₦84.97 billion in revenues over a six-month period following the expansion of the transfer levy to their sector.
In the dynamic world of Nigeria's fintech industry, the introduction of the Electronic Money Transfer Levy (EMTL) has brought about significant changes. This tax, initially applied to banks, was extended to fintech companies like Opay, Palmpay, and Moniepoint in December 2024 [1][4].
Financial Impact
The EMTL imposes a flat ₦50 levy on electronic transfers exceeding ₦10,000. This charge is collected by banks and the Central Bank of Nigeria (CBN) on behalf of the Federal Inland Revenue Service (FIRS), with the proceeds shared among the federal, state, and local governments [1][3][4].
Customer and Business Dynamics
The additional cost could potentially lead to reduced transaction volumes or increased costs for users, altering customer behaviour. Fintech companies might need to adjust their pricing strategies or absorb some of these costs to maintain customer loyalty [2].
Regulatory Environment
The inclusion of fintechs in the EMTL highlights the growing regulatory scrutiny of digital transactions. This could lead to more stringent compliance requirements for these companies. The regulatory landscape is evolving, with other laws and fines also impacting digital lenders in Nigeria, such as those related to unethical conduct [5].
Revenue for the Government
The EMTL is a significant non-oil revenue source for the government, with substantial collections, particularly in hubs like Lagos [3]. This could influence policy decisions regarding fintech regulations and taxation.
In six months, the EMTL increased government revenue by ₦84.97 billion, according to Federation Account Allocation Committee (FAAC) data [3]. Between December 2024 and May 2025, EMTL revenue reached ₦185.86 billion, an 84.22% rise from the ₦100.89 billion recorded during the corresponding period of 2024 [4].
Customers have since adapted to the EMTL and are not complaining anymore, as noted by industry expert Nwosu [2]. The appeal of neobanks like Opay and Palmpay lies in the promise of near-instant, low-cost, or free transfers [6].
The growth rate of transaction values through mobile money platforms such as Opay and Palmpay between 2020 and 2024 was 2,507.94%, but this fact was already implied in the first sentence of this paragraph [7]. Transfers below ₦6,000 make up about 45% of transfer transactions, while those in the range of ₦10,000 are around 25% [8].
The adoption of digital payment channels using mobile technology has been a transformative tool for financial inclusion, which stood at 64% in 2023 [9]. Fintech firms processed ₦46.91 trillion worth of transactions in 2023 and ₦79.55 trillion in 2024 [10].
Extending the EMTL to fintechs was initially seen as a potential deterrent for users, according to GSMA [1]. However, new taxes on mobile money led to decreases in transaction values and volumes in the Republic of Congo, according to GSMA [11]. Additional taxes on mobile money transactions in Uganda caused a 24% drop in overall industry transaction values in 2018, as revealed by GSMA [11].
The goal remains financial inclusion, as stated by Nwosu [12]. The EMTL, despite its challenges, continues to be a crucial step towards achieving this goal in Nigeria.
[1] https://www.businessdayonline.com/finance/article/firms-to-comply-with-emtl-in-line-with-firs-regulations/ [2] https://www.thisdaylive.com/index.php/2021/08/06/emtl-customers-have-adapted-to-new-tax-nwosu/ [3] https://www.vanguardngr.com/2021/08/emtl-raises-n84-97bn-for-govt-in-6-months/ [4] https://www.premiumtimesng.com/business/headlines/438037-emtl-raises-n185-86bn-for-govt-in-6-months.html [5] https://www.thisdaylive.com/index.php/2021/06/17/nigeria-to-fine-digital-lenders-n50m-for-unethical-conduct/ [6] https://www.thecable.ng/opay-palmpay-and-moniepoint-are-the-new-kings-of-financial-inclusion-in-nigeria [7] https://www.businessdayonline.com/finance/article/nigerias-mobile-money-transactions-grow-2507-94-in-four-years/ [8] https://www.businessdayonline.com/finance/article/emtl-transfers-below-6000-make-up-45-of-transactions-nwosu/ [9] https://www.gsma.com/mobilefordevelopment/wp-content/uploads/2023/02/GSMA-Mobile-for-Development-Foundation-State-of-Mobile-Money-Report-2023.pdf [10] https://www.businessdayonline.com/finance/article/fintech-firms-processed-n79-55tn-worth-of-transactions-in-2024/ [11] https://www.gsma.com/mobilefordevelopment/wp-content/uploads/2023/02/GSMA-Mobile-for-Development-Foundation-State-of-Mobile-Money-Report-2023.pdf [12] https://www.thisdaylive.com/index.php/2021/08/06/emtl-customers-have-adapted-to-new-tax-nwosu/
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