Business
How payment cards ‘ll drive Nigeria’s financial inclusion in 2023
Ahead of the launch of the Central Bank of Nigeria (CBN) Domestic card scheme come January 16, 2023, through the Nigeria Inter-Bank Settlement Systems (NIBSS) in partnership with the Bankers Committee, experts say there are already existing cards fulfilling the rationale put forward by the apex bank.
Reports show that these payment cards provide affordable transaction fees, and are widely accepted, ensuring that there is a payment card in the hands of every willing Nigerian.
For instance, Verve, which has helped in closing the gap for a domestic card scheme in the payment market, has expanded its acceptability beyond Nigeria to other African countries.
Prior to now, Verve card has fulfilled the need for a domestic card scheme in the country while the international card schemes remain convenient.
In its announcement, the CBN stated that the domestic card will be tackling challenges including financial exclusion, rigorous transaction processes, and exorbitant transaction fees among others.
According to data from NIBSS, the volume of card transactions as of August 2022, is pegged at 37 percent of the total online transactions performed in the country.
On the other hand, the use of bank and cash transfers accounted for 26 percent and 20 percent of the payments, respectively.
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The leading position of card payments proves the existing payment card schemes; Mastercard, Verve and Visa have helped and are still helping to drive the card payment figures.
Therefore, this expectation of the government from its National domestic card scheme is being met by the available payment cards in the market.
In another statement made by the Chief Executive Officer of NIBSS, Premier Oiwoh, the card scheme is expected to reduce the dependency on cash across the payment landscape and help promote the cashless initiative by the central bank.
The existing card schemes with the banks and more recently the fintech companies have been worthy partners with the CBN in driving the cashless initiative.
These key financial players have moved the cashless payment dial by 41 percent year-on-year to N210.08 trillion in the first seven months of 2022, according to data from NIBSS.
On the part of accessibility and affordability, in the early 2000s when payment cards were introduced in Nigeria, the cards were not readily accessible by all Nigerians and were highly priced.
With the collaboration among the card schemes leveraging intra-country infrastructure, the international card schemes became fairly priced and started billing against the Naira. This has contributed immensely to the growth of card payments in the country.
The CBN spokesperson, Osita Nwanisobi also stated that the scheme would deliver lower-cost payment services that are more accessible and affordable for Nigerians.
However, the issuance of payment cards has evolved such that they are no longer given by financial institutions alone, making them further accessible. Other service providers including retail stores, and e-commerce platforms, among others, now offer payment cards to their customers.