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National Card, AfriGo to Boost Financial Inclusion, Deliver Lower-Cost Payment Services

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CEM REPORT, FINANCE | Coming 10 days behind the earlier scheduled time, the Central Bank of Nigeria (CBN) and the Nigeria Inter-Bank Settlement Systems (NIBSS) have unveiled Nigeria’s first National payment card, AfriGo.

The card which is expected to cater for local peculiarities that the existing card products have failed to cater for is aimed at boosting financial inclusion in the country and reducing dependence on foreign cards.

AfriGo is also designed to deliver lower-cost payment services that are more accessible and affordable for Nigerians.

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At the unveiling at a virtual event on Thursday, the CBN Governor, Godwin Emefiele, said the launch was another major step to ensure a thriving and competitive payment landscape in Nigeria.

“I am gratified that the Nigerian banking community has risen to the challenge of the national payment system through the implementation of a National Domestic Card Scheme.

”The cashless policy which commenced in 2012 signposts our core drive to strengthen the national payment system and the usage of electronic platforms in Nigeria.

“We will all agree that the cashless policy has created value and gender competition, and attracted investments into the Nigerian banking and payments ecosystem.”

Speaking on the benefits the card holds for the country, the CBN governor stated that the card provides an opportunity to integrate the informal sector of the economy into the financial system.

He added that apart from fostering innovation within the Nigerian domestic market, the scheme would allow banks to offer a variety of solutions including debit, credit, virtual, loyalty, and tokenized cards amongst others

He said the card scheme will also lower the cost of card production for Nigerian banks and reduce the need for forex to acquire foreign cards.

The CBN governor said that while the penetration of card payments in Nigeria had grown tremendously over the years, many Nigerians were still excluded.

Emefiele said the scheme was, therefore, an important plot in closing the gap that had remained since the cashless policy was introduced in 2012.

It is important to note that the establishment of a national domestic card scheme is in line with domestic global trends.

“The initiative is aimed at providing more options for domestic consumers while promoting the delivery of services in a more innovative, cost-effective and competitive manner.”

“It is important to note that all domestic transactions that are conducted in Nigeria will have to go through the national domestic card.”

Emefiele also noted that the introduction of AfriGo was not an attempt to discourage international investors’ operations in the Nigerian payments space but that it had become necessary owing to its obvious advantages.

This effort is not an attempt to prevent international service providers from continuing to provide services in Nigeria. Rather, it aimed at providing more options for domestic consumers, while also promoting the delivery of services in a more cost-effective and competitive manner.

“The CBN is committed to a robust and safe payment system and welcomes innovations from domestic and foreign investors.

“The Nigerian market is vast and the current participants have done so in the last 12 years to transform the ecosystem. Yet there is much ground to cover as millions of Nigerians are still without cards to consummate transactions.

“I am convinced that the National Domestic Card scheme will make this a reality in the coming months. We can no longer neglect the vast majority of Nigerians.”

Also commenting on the National Domestic Card Scheme, the Deputy Governor of CBN and Chairman of NIBSS, Aisha Ahmad, said the industry will reap potential benefits which include improved transaction security, better pricing opportunities, reduced demand for FX and less pressure on the Naira, locally relevant partnerships and offerings developing local skills in card and payment space.

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She noted that Nigeria has a low card-to-population ratio when it is benchmarked globally, adding that this has a major impact on the government’s drive to aggressively boost financial inclusion.

She recalled the global card ownership statistics report, stating that the Nigerian adult population owns about 32% and 3% of Debit & Credit cards.

This ranks Nigeria as the 75th in the world in debit card to population ratio and 114th in the world in credit card to population ratio. “

Ahmad disclosed that the AfriGo card was developed by AfriGopay Financial Services Limited, an affiliate of NIBSS licensed by the CBN.

The Company is responsible for deploying and managing the National Domestic Card Scheme for Nigeria.

With the AfriGo card, Nigeria has joined countries like China, Russia, Turkey, and India which have their local cards. He noted that the operation of the local cards will not prevent the use of the existing international cards but will provide more options for Nigerians.

The Nigerian National Domestic card is expected to rival Visa and Mastercard, the market’s biggest players.

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