Change is the only constant in life, and humanity has consistently bent nature to create it. And nowhere is this more obvious than in how we make payments.
Smoke signals and pigeons were once standard means of long‑distance communication; survival depended on roots and herbs. Once upon a time, caves and mud houses were our homes, horses were royal transportation, and the design of swords and shields counted as strategic military assets.
As communication, medicine, housing, transport, and warfare evolved, so did a quieter but equally important system: how value moves from one person to another.
The way payment was facilitated when we used stars as navigation tools is completely different from how it works today. Imagine if education had evolved to virtual classes and cross‑border admissions, but payment was by barter.
This article argues that account‑based payments are the flavour of the decade in Nigeria and previews the future as we prepare for worlds like AI‑driven, “invisible” commerce. It also examines the major payment methods and how each sought to address the inefficiencies of the previous ones before culminating in where we are now.
Barter
In the earliest societies, trade was conducted through barter, a direct exchange of goods and services. It worked in small communities, but it had serious limitations. For example, it’s not every day you will find someone with exactly what you want in return for what you have.
In barter, value is not standardised, and it’s difficult to stop a counterparty from inflating the value of their items while undervaluing yours. These frictions made it obvious that we needed something more portable, more standard, and less dependent on coincidence.
Commodities as currency
To overcome barter’s limitations, societies began using commodities like salt, cattle, and grains as money. People would offer grains, salt, or livestock in exchange for almost everything else. It was better than pure barter, but new problems appeared: what if I don’t need salt? What if I have so much grain that I worry about storage?
We moved from item‑for‑item swaps to agreed commodities, but issues of durability, portability, or universal acceptability remained.
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Coins
Next came the need for even more standardisation. Societies wanted money that was divisible, durable, and easier to standardise. Around 2000 BC, metal coins made from gold, silver, and bronze became prevalent.
The first official minting of currency is recorded to have started by the Lydians around 600 BC. This was a big improvement on perishable goods and offered a more reliable unit of value. But again, new problems arose: coins are heavy. The system had become more standardised and durable but was not easily scalable.
Paper money and cheques
By the 11th century, paper currency was in use as a mode of payment, and by the 17th century, paper notes were so widespread that they had been adopted across Europe. Paper solved the weight issue; notes are easier to carry than bags of metal. But again, notes can be counterfeited.
In the late 1690s, the Bank of England and the Bank of Scotland were established and began issuing banknotes. The banking system reduced the need to carry cash and improved safety. Cheques emerged as a method for instructing banks to pay a specific amount from one account to another and to keep a record of such instructions.
Cheques made it easier to pay or be paid large sums, but they were prone to forgery. They relied on manual authentication and took a long time to clear, sometimes up to three weeks. The chequing system has since been refined, but many of these structural issues remain, including latency, friction, and trust gaps.
Plastic money
Plastic money in the form of charge cards entered the payments scene in the 1950s. In 1958, Bank of America launched the first credit card. Cards were convenient and eliminated some cheque‑related issues, such as manual verification and physical clearing delays. But again, new weaknesses were spotted.
Cards are very prone to fraud, and they rely on multiple layers of transactions and partners, all of whom must behave correctly within milliseconds. This complexity directly affects success rates and dispute resolution. We had gained real‑time authorisation at the point of sale, but we had also created a complex, fragile tower of intermediaries.
Electronic money
The proliferation of smartphones and the internet changed everything. You no longer need to walk into a physical store to buy clothes or visit a station to get tickets. Your entertainment can be personalised and delivered to your phone. So naturally, payments became electronic, and the most evolved options, cards, were the first to go online.
Card transactions ballooned in the early to mid‑2010s in Nigeria as debit card and eCommerce adoption grew. By the mid to late 2010s, a rapid proliferation of tech startups in Nigeria exposed the weaknesses of card‑based transactions even more clearly — high failure rates, fraud, chargebacks, complex disputes, and reconciliation issues.
Enter account‑based payments
At this point, sending money to friends and loved ones via bank transfers has become mainstream. But it was not yet the default way for businesses to get paid. By the late 2010s, that started to change. Interest in account‑based payments grew rapidly.
Account‑based payments improved on cards in a few ways. The fewer intermediaries this option had resulted in a higher success rate. Settlements were typically instant or near instant and were not accompanied by the baggage of chargebacks and fraud patterns.
Virtual accounts and structured narrations made it easier to reconcile who paid what and when, resulting in clearer visibility for businesses in their inflows. In short, account‑based payments reduced friction exactly where cards were weakest in Nigeria.
Between 2019 and 2020, during COVID-19, everyone was forced to become more digital, and payments followed. People leaned into the option they were already conversant with: account‑to‑account transfers. At this point, banks had mobile apps that, for the most part, worked as advertised. Buyers trusted the confirmation receipts from their banking apps. A simple “Do you accept transfers?” question became the norm. A radical shift in customer behaviour was underway as consumers gravitated toward what worked more reliably.
Businesses had to respond quickly to avoid losing sales. By the early 2020s, especially during the cash crunch that preceded the 2023 elections, everyone had to adopt transfers. Crucially, this crisis hit a market where virtual‑account collection systems were already established, and businesses had integrated gateways for them. So when cash disappeared from circulation and POS terminals became unreliable lifelines, the rails that held firm were account‑based. That reliability changed behaviour permanently.
From workaround to infrastructure
What began as a workaround became a preference. What was once informal became institutional. What started as peer-to-peer is now powering enterprise collections, subscriptions, wallets, payroll, and credit. Today, account-based payments are not just an alternative; they are the flavour of the decade.
Cards still power cross‑border commerce and global subscriptions. But domestically, Nigeria has leapfrogged. Just as the country skipped widespread landlines and went straight to mobile, it is now skipping a card‑dominant phase and moving directly to real‑time account‑to‑account infrastructure.
Developed markets that built deep dependence on cards are now investing heavily in real‑time payment systems, open‑banking frameworks, instant transfer schemes, and account‑to‑account alternatives. From the UK’s Faster Payments to Brazil’s PIX to the US’s FedNow, you see the same pattern: fewer intermediaries, direct bank authentication, instant settlement, and embedded financial services. What is emerging globally is what Nigeria has already embraced organically. If evolution teaches us anything, it’s that systems that reduce friction tend to survive.
Flavour of the decade
From barter to digital, each step has been about simplifying exchange and increasing trust. Account‑based payments are the next logical refinement in that long arc. In a world preparing for AI‑driven commerce, autonomous transactions, and “invisible” payments, the rails must be instant, programmable, and reliable. Account‑based infrastructure gives you exactly that.
In Nigeria, the future of payments has quietly arrived, and it is account‑based. For anyone building in this ecosystem, the practical implication is simple: you don’t design for “cards first” anymore. You design for accounts.
About the author
Yvonne-Faith Elaigwu is a generalist with a wealth of experience in people management, strategic planning, negotiation, and sales. As the current Head of Customer Operations at OnePipe, she plays a pivotal role in driving customer satisfaction and growth. She is also a Trustee at Open Banking Nigeria, where she actively contributes to shaping the future of the financial ecosystem.
