Mobile Apps Overtake USSD as Nigeria’s Digital Payment Channel Hits ₦104 Trillion

Nigeria’s digital payments landscape has reached a pivotal milestone: mobile apps have officially overtaken USSD (Unstructured Supplementary Service Data) as the country’s top channel for digital transactions. In the first quarter of 2025, the value of app-based payments jumped 33.65% year-on-year to hit ₦104.07 trillion, according to industry data highlighted in the Frontier Fintech GPS newsletter, October 29, 2025. This marks a decisive shift in how Nigerians access and move money, with mobile apps now accounting for the lion’s share of digital payment volume.

For years, USSD—which enables basic banking via simple phone menus, even without internet—has been the backbone of Nigeria’s financial inclusion drive, especially in rural and underbanked areas. However, the rapid spread of affordable smartphones (now used by over 60% of the population) and improved mobile data networks have fueled a consumer preference for app-based platforms. Users are drawn to the richer interfaces, enhanced security, and greater stability offered by dedicated banking and fintech apps, which often integrate features like QR payments, budgeting tools, and instant notifications.

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This transition is more than a technical upgrade—it signals a strategic realignment in Nigeria’s fintech ecosystem. Banks and homegrown fintech firms are investing heavily in mobile technology, reducing their dependence on telecom companies that traditionally controlled USSD rails. As a result, telcos are losing influence in the digital finance space, while financial institutions gain tighter control over customer relationships and transaction data.

Industry observers describe this as a “major milestone” for Nigeria’s cashless economy, with discussions buzzing in local fintech and business forums. The trend underscores how Nigeria’s payment infrastructure is maturing, moving from basic, inclusive channels like USSD to sophisticated, app-driven ecosystems that cater to a tech-savvy, urbanizing population.

Yet, the story isn’t just about numbers. The rise of mobile apps reflects broader shifts in consumer behavior, technology adoption, and corporate strategy. While USSD remains vital for reaching Nigerians without smartphones or reliable internet, its role is increasingly complementary rather than central. Meanwhile, the growth of mobile apps is driving innovation across the sector, with features like real-time analytics, AI-powered fraud detection, and seamless cross-border payments becoming standard.

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