The Central Bank of Nigeria (CBN) has announced that it will be launching Africa’s first national domestic card scheme by January 16, 2023. This important step is expected to bring multiple transformative benefits for the country’s residents, including enhanced financial inclusion and increased affordability of payment services.
Read ahead to find out why experts forecast this initiative to be successful and learn how exactly the introduction of a national card scheme will influence the Nigerian payments landscape.
Currently, Nigerian financial institutions feature three card payment providers, namely:
In 2021 alone, the value of card transactions facilitated by these market players equaled $18.2 billion. This figure is expected to keep increasing at a compound annual growth rate (CAGR) of over 18% until 2025.
CBN’s ambition is to launch Africa's first central bank-driven card scheme that blends a fully domestic infrastructure with cross-border interoperability. It will allow banks and other institutions to offer a wide array of payment solutions including debit, credit, virtual, loyalty, and tokenized cards.
The central bank’s idea is to build a system similar to India's RuPay and achieve comparable success. For reference, the Reserve Bank of India reported that RuPay boasted a 60% card market share in India as of 2020, a drastic increase from 15% in 2017.
According to CBN’s representatives, these plans are realistic to fulfill, with the project having the potential to become the largest in Africa, and one of the most prominent in the world.
Nigeria’s domestic card payment scheme is a joint project of a number of parties, including:
A nationwide initiative with such support is sure to create a big impact on the country’s payments landscape. The key benefits that are expected to follow its introduction are:
The list of the new scheme’s potential advantages goes on, which makes it clear that this project is a true game-changer for the Nigerian payments ecosystem and beyond.
The launch of the domestic card payment scheme will enable Nigeria to join a growing list of counties that have succeeded in this endeavor and are now reaping the benefits, such as India, Brazil, Turkey, and China.
Should CBN’s ambitions be fulfilled, the new scheme will be leveraged as a platform for seamlessly spreading government-to-person payments and other socially significant initiatives. This, in turn, is likely to improve financial inclusion and support the development of a robust digital economy within the Nigerian domestic market and across the African continent.
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