Zone, a Nigerian payments infrastructure firm, has processed transactions exceeding ₦1 trillion on its blockchain network between November 2022 and December 2024. The company recorded 100 million transactions, with an average value of ₦10,000 per transaction. Despite the slow adoption of blockchain technology in the banking sector, a significant portion of these transactions was conducted through automated teller machines (ATMs), marking a milestone for blockchain-powered payments in Nigeria.
This achievement comes at a time when ATM usage has been on the decline. Over the past three years, the total value of ATM transactions has dropped from ₦32.65 trillion in 2022 to ₦28.2 trillion in 2023, as consumers increasingly favor Point-of-Sale (POS) terminals and digital payment solutions. Currently, 12 banks are utilizing Zone’s blockchain network, though only a few have adopted it for ATM transactions.
The company’s leadership has indicated that broader ATM adoption could have accelerated the achievement of this transaction volume. The ATM served as a test case for introducing the system in a controlled manner, ensuring that the blockchain network could handle transactions efficiently before scaling up to heavier payment volumes.
Expanding Blockchain Applications to POS Payments
Zone’s blockchain network offers banks faster settlement times for ATM transactions, but some financial institutions have integrated it for a different purpose. ZonePoS, another service from the company, enables the processing of POS payments through blockchain technology.
After securing a switching license in 2022, Zone initiated a test phase for its blockchain network on ATMs in November of that year. The primary challenge during the initial phase was onboarding banks and addressing regulatory concerns about compliance. By automating several manual processes typically associated with financial audits, the company was able to demonstrate its system’s reliability. The pilot rollout in late 2022 paved the way for commercial operations starting in January 2023, with Zone collaborating closely with banks to enhance their payment infrastructure.
One of the major concerns for traditional financial institutions has been the regulatory uncertainty surrounding existing blockchains and decentralized finance (DeFi) solutions. Many banks are hesitant to engage with blockchain-based systems due to fears of non-compliance, potential fines, or even loss of operating licenses.
Zone asserts that its Layer-1 blockchain is capable of processing 10,000 transactions per second (TPS), making it highly efficient for financial transactions. The effectiveness of the system in handling ATM transactions, combined with a surge in POS transactions, prompted the company to expand its blockchain network to terminal payments.
Strategic Partnerships and Regulatory Approvals
In June 2024, Zone extended its blockchain network to POS terminals. By August, the company partnered with the Nigeria Inter-Bank Settlement System Plc (NIBSS), the nation’s primary payment switch, to facilitate the recording of POS transactions on its blockchain ledger. This collaboration enables NIBSS to manage interactions between cardholder banks and POS terminals using Zone’s regulated blockchain framework.
The partnership was initially scheduled to commence in October 2024, with NIBSS being fully integrated into Zone’s blockchain ecosystem. This integration represented a groundbreaking move, marking the first instance of a major regulatory body operating at scale within a blockchain framework.
However, the process faced delays due to NIBSS’s institutional structure and the uncertainty surrounding the Central Bank of Nigeria’s (CBN) stance on the initiative. Although Zone reached an agreement with NIBSS in August 2024, the CBN granted final approval only in December, prolonging the implementation timeline.
As a regulated entity, NIBSS adheres to stringent institutional processes, ensuring that all operations align with its project cycle. Zone has since added NIBSS to a testnet on its blockchain and continues to test the system to verify data integrity while preparing for full-scale implementation. While the network is not yet actively recording payment transactions, it currently collects and stores POS terminal identities, with NIBSS verifying these records on the blockchain.
Future Expansion and Business Prospects
Zone is proceeding cautiously with the rollout of its blockchain for POS payments, prioritizing regulatory trust and compliance. The company aims to expand its technology beyond Nigeria’s borders in the coming years, though discussions with foreign financial institutions have yet to take place.
The startup has declined to disclose its revenue figures, citing confidentiality agreements with investors. Looking ahead, Zone plans to extend its blockchain payment rail to businesses facilitating account-to-account fund transfers, further integrating its technology into everyday financial transactions for Nigerian consumers.
