In line with its mandate to promote stability, inclusion and growth in the financial and payment system, the Central Bank of Nigeria (CBN) has introduced a national domestic card scheme.
The apex bank launched the card on January 16, 2023, in partnership with the Nigeria Inter-bank Settlement System (NIBBS).
The National Domestic Card is intended to serve as a credit card and debit card, among other functions. It is expected to compete with other industry players like Mastercard, Discovery, and Visa cards.
Local banks and other financial institutions will offer payment solutions such as credit, debit, virtual, loyalty, tokenised cards, non-interest, and identity cards.
CBN introduced the card because it believes Nigeria is mature and has achieved substantial digital transformation in its payments system in the last ten years.
The bank stated that the project has been driven by rapid digital and tech innovation, increasing mobile access, and the CBN’S policies, which have boosted the unrivalled adoption of digital financial services in the country.
Benefits and features of the National Domestic Card include reducing cost and foreign exchange use, protecting data sovereignty, and Making cards and payments more accessible and affordable for Nigerians.
According to reports, CBN said that the National Domestic Card would improve the sovereignty and security of Nigerians’ data and operations since Mastercard and other major industry players control such cards from overseas.
Per the CBN statement, the card will improve and boost financial inclusion in the country.
It will also serve as a platform to leverage the seamless dissemination of government-to-person payments and other social impact initiatives, thereby enhancing financial inclusion and supporting the growth of a robust digital economy.
It will be provided via Nigeria’s central switch system, the Nigeria Inter-Bank Settlement System (NIBBS) in partnership with the Bankers Committee and other stakeholders in the financial ecosystem.
The CBN said: “The domestic card scheme will be an essential game changer for financial inclusion in Nigeria.
“The plan is to deliver Africa’s first central bank-driven, domestic card scheme that combines a fully domestic infrastructure with international interoperability.
“Our plans will enable us to pivot into the largest card scheme in Africa, and amongst the biggest globally.”
He said: “This card will be configured to address the unique ecosystem issues we have to help improve payment system issues across the nation.
“We also expect the card to provide affordable pricing, adding that the charges will undoubtedly be lower because it is expected to be charged in Naira against foreign currency.
“NIBSS is a sharing infrastructure. The card central management system will be shared, and each integrating entity will integrate via the APR platform. We expect that other value additions will be mined and created around this scheme.”
The CBN, in partnership with the Nigeria Inter-Bank Settlement System (NIBBS), said the scheme will unify payments in Nigeria and attract the unbanked population. The card is also expected to rival big industry players such as Mastercard and Visa.
It is not clear if the card would be used for international transactions since most banks in Nigeria have stopped using naira cards for such purposes. NIBBS Managing Director Premier Oiwoh stated at the Bankers Committee meeting that the card is being deployed to help improve the country’s payments ecosystem.
Other countries with National Domestic Card Monday’s deployment enlisted Nigeria among top countries such as Brazil, India, Turkey, China and Singapore with similar schemes.
Those countries have reportedly harnessed the benefits of the National Domestic Card schemes in their respective countries to drive their payments and financial ecosystems.
The countries have harnessed the transformative benefits of the schemes to drive their payments and financial systems, particularly for the underbanked.
