Lekan Adefolarin in this piece takes a look at the recent launching of a Nigerian Domestic Card and its implications and benefits for the economy and the people. Please read on.
Global financial and business environment continues to unfold. Even in the face of uncertainties that envelope current economic reality. We continue to witness arrays of meaningful and life changing packages cutting across the way things are done. In recent times, the means of exchanging and trading as well as transaction payment for goods and services have all been impacted. This is courtesy of developed and developing empirical innovation in telecommunication. Although as it stands, developed nations in their quest for better society re- engineer and re-tool the usage of telecommunication technology to achieve these fits. That is why, it has been said that telecommunication has allowed the world to be moving far in speed of points, and no nation can afford to be left behind.
The foregoing speaks to the intent of the recently launched ‘Afrigo’ National Domestic Cards of Nigeria. By the Central Bank of Nigeria (CBN) in collaboration with Nigeria Inter-Bank Settlement Systems (NIBSS) in partnership with the Bankers Committee.
Expressly, this latest initiative is part of the apex bank’s pragmatic ways of strengthening the national payments system through the implementation of a Domestic Card Scheme. Afrigo is in line with the National Payments System Strategy of the CBN. Meanwhile, this is the same vein with the Apex bank’s initiatives such as the Bank Verification Number (BVN), Real Time Gross Settlement System (RTGS), Shared Agent Network Facility (SANEF), Regulatory Sandbox, Open banking and the eNaira.
Instructively, speaking at the unveiling of the country’s domestic card scheme. The CBN governor, Godwin Emefiele, said the event signals another major step in the drive to ensure a thriving and competitive payment landscape in Nigeria. According to Emefiele, “given the limited usage of cards by Nigerians and in a bid to deepen penetration, the Bank actively promoted the National domestic card scheme which will be accessible to all Nigerians and also address our local peculiarities. In addition, “Afrigo card scheme is therefore an important plug in the gap that has remained with us since the cash-less policy was introduced”.
In retrospect, the CBN Cash-less Policy started in 2012, as the core drive to strengthen the national payment system and deepen the usage of electronic platforms in Nigeria. Interestingly, the cash-less policy has created value, engendered competition and attracted investment into the Nigerian banking and payments ecosystem. That is why the likes of Visa and Mastercard have dominated the card payment market in Nigeria. And they would remain convenient, particularly for international transactions. On the other hand, Afrigo as a national domestic card is expected to serve the unbanked market population and increase competition within the payment landscape.
Conversely, the question that Nigerians may ask is Why national domestic cards now? Answer to this question lies within the benefits national domestic cards provide. For instance, it ensures the capacity to reduce Nigeria’s reliance on foreign-owned financial services companies. Moreover, across the world, it is a trending monetary policy that embraces Fintech innovation and financial penetration and inclusion service. Hence, joining countries like China, Russia, Turkey and India which have launched similar national domestic card schemes is a worthwhile initiative.
Also, given the challenge of “proliferation of products, channels and participants which significantly increased foreign direct investments into the Nigerian payments space without the benefits of helping us harness the unbanked and underbanked population for a transformative financial penetration and inclusion system. In 2021 card transactions carried by Nigerians amounted to $18.2 billion dollars. Yet still, there is much ground to be covered as millions of Nigerians are without payment cards to consummate transactions.
Going forward, the “Afrigo” national domestic card is out for a robust, ecosystem efficient and safe national payments system and welcomes innovation from both domestic firms and foreign investors.
What needs to be done. Instructively, this Afrigo national domestic card is strategic to enhance the smooth operation of the cashless policy of the CBN monetary policy. However, measures must be put in place to reduce the challenges of high cost of card services, and ensure to address infrastructure peculiarities, challenges of the Nigerian micro and macro payment ecosystem.
And in the words of Dr Tope Fasua this is another “Leap in Financial Innovation…as the national domestic card scheme bodes opportunities for our economy to integrate the informal segment of our economy”. Hence, we must embrace and can no longer neglect.
Adefolarin A. Olamilekan is an Abuja based Political Economist and can be reached via email @adefolarin77@gmail.com or on 08107407870