Nigeria’s digital payments sector has witnessed rapid growth over the years, yet contactless payments remain largely unexplored. PalmPay, one of Nigeria’s leading fintech companies, is set to change that narrative. In partnership with contactless payment infrastructure provider CashAfrica, PalmPay is introducing tap-to-pay functionality on its POS terminals, a move that could revolutionize transactions in the country.
The Rollout Strategy
PalmPay is kicking off with a pilot phase, deploying 1,000 tap-to-pay-enabled POS terminals before a nationwide expansion in March 2025. This initiative is designed to introduce Nigerians to the ease of NFC (Near Field Communication)-based payments, allowing transactions through debit and credit cards, mobile wallets, and wearables.
PalmPay will leverage CashAfrica’s technology, which processes contactless transactions on a per-API-call basis, meaning the fintech company incurs costs with each tap-to-pay transaction. If the pilot phase proves successful, PalmPay plans to expand the feature across its 300,000 POS terminals nationwide.
Why Now? The Need for Contactless Payments
Despite Nigeria’s strides in digital payments, transactions remain heavily reliant on cash, bank transfers, and PIN-based card payments. While fintechs like OPay, Moniepoint, Paga, and FirstMonie have played significant roles in digital payment adoption, challenges persist.
Contactless payments present a faster, more seamless, and potentially cost-effective alternative to traditional payment methods. Industry experts agree that now is the right time for this innovation, especially considering Nigeria’s increasing financial fraud risks.
Ajibade Laolu-Adewale, Chairman of the Committee of E-Business Industry Heads (CeBIH), underscored the importance of this move: “Beyond the safety issues, this innovation will also enable merchants to provide faster, smoother, and easier transactions.”
Challenges in Adoption
The adoption of tap-to-pay technology in Nigeria has been slow. The primary existing alternative, NIBSS’ NQR (Nigeria Quick Response), has seen limited uptake, with only First Bank and Providus Bank actively supporting it. This gap presents an opportunity for PalmPay and CashAfrica.
However, merchant adoption remains a major hurdle. While PalmPay has not disclosed its merchant education strategy, incentives and training will be crucial in driving widespread adoption.
Security Measures for Contactless Payments
Security remains a top priority for fintechs introducing new payment methods. PalmPay and CashAfrica are implementing multiple security features to protect users from fraud, including:
- Explicit Authorization: Every tap requires user confirmation to prevent unauthorized transactions.
- Tokenization & Encryption: Sensitive payment data is encrypted to ensure security.
- Session Expiration Mechanisms: These prevent unauthorized reuse of payment details.
The Future of Digital Payments in Nigeria
Fintech companies have spent years moving Nigerians away from cash towards bank transfers, mobile apps, and QR code payments. Now, the next phase of innovation is here: making digital payments faster, smoother, and nearly invisible.
If PalmPay and CashAfrica succeed, contactless payments could become mainstream, reducing reliance on PIN-based transactions and revolutionizing how Nigerians pay. The biggest challenge in the near future may no longer be adoption—but remembering the last time you actually typed in a PIN.