— Central Bank of Nigeria (CBN) plans to launch a domestic card scheme in 2023.
— The scheme could see the local card rival Visa and Mastercard, and it could improve card services offered by local banks.
Last week, the Central Bank of Nigeria (CBN) revealed its intention to launch a domestic card scheme in 2023. The country’s apex bank said that it will begin the process on January 16, 2023.
According to a spokesperson, the aim is to improve financial inclusion and offer payment services at lower costs for Nigerians to afford. Also, the CBN hopes that the scheme would encourage innovation locally and increase card services offered by banks.
Currently, Nigerian banks rely on Visa and Mastercard for their card services and they only offer debit cards to the large population. However, with the domestic card scheme, CBN believes that Nigerians could start enjoying debit, credit, virtual, loyalty and tokenized cards.
There is also the aspect of data collection which the country’s bank is missing out on in some way, likely due to second-hand information. The case would be different when it is in control of the data obtained from using its local cards and would play a role in informing domestic investors on what products and services are vital, locally.
Not to forget, card services is a major business on its own with huge financial compensation. For example, a chunk of Mastercard’s $18.88 billion revenue in 2021 was from its card services. Offering a domestic version to rival the foreign bodies could also ensure that money stays within the country.
Understandably, some of the international transactions made possible by using Visa or Mastercard services may become impossible. So, it is likely that banks will offer multiple cards for the same account or users may have to create multiple accounts for different cards.
The domestic card scheme would be launched through the Nigeria Inter-Bank Settlement Systems (NIBSS) and with contribution from the Bankers Committee, ensuring that all financial institutions in the country take part in the exercise.
In a larger way, the scheme may be part of the institution’s strategies to salvage the Naira. We have heard of its plan to redesign the Naira and even rumours of taking over domiciliary accounts.
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