The national domestic card scheme being planned by the apex bank in collaboration with the Nigeria InterBank Settlement Systems Plc (NIBSS) and the Bankers’ Committee will come into effect on Monday, January 16, 2023.
A credit card designed by the Central Bank of Nigeria (CBN)
for domestic use has been scheduled for deployment today
The card is expected to compete with other debit cards,
including Mastercard, Discovery and Visa cards.
Following its introduction, local banks and other financial
institutions will be in a position to offer payment solutions like debit,
credit, virtual, loyalty and tokenised cards, non-interest card, identity card.
The CBN said it introduced the National Domestic Card
because of its belief that Nigeria has achieved “significant transformation in
its payments system over the past decade.
The apex bank added that this has been driven by rapid
digital and technological innovation, increasing mobile penetration and the
proactive policy initiatives of the CBN which have spurred unprecedented
adoption of digital financial services.”
It listed the benefits of the card scheme to include among others
•Reduction of cost and use of foreign exchange
•Protection of data sovereignty
•Enabling locally relevant propositions
•Making cards and payments more accessible and affordable
for Nigerians.
Given that MasterCard, Visa, Discovery and other such cards
are foreign controlled, the bank said National Domestic Card would ensure
“improved sovereignty and security of our data and its operations will be
locally based. It will also help to improve and drive financial inclusion
nationwide”.
The card also has the potential to leverage its platform
“for seamless dissemination of government-to-person payments and other social
impact initiatives, ultimately enhancing financial inclusion and supporting the
growth of a robust digital economy”.
The card will be delivered through Nigeria’s central switch,
the Nigeria Inter-Bank Settlement Systems (NIBSS) Plc, in conjunction with the
Bankers Committee and other financial ecosystem stakeholders.
Today’s deployment will enlist Nigeria into the growing list
of countries like India, Turkey, China, and Brazil that have launched similar
cards for domestic use.
The countries have harnessed the transformative benefits of
the schemes to drive their payments and financial systems, particularly for the
underbanked.
The CBN said: “The domestic card scheme will be an important
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.”
It could not be ascertained yet if Nigerians would be able
to use for international transactions as its application is for now restricted
to our local shores.
At the Bankers’ Committee meeting where the decision to
introduce the card was taken, NIBSS Managing Director, Premier Oiwoh said the
scheme is “being deployed to help improve the payment landscape across the
ecosystem in Nigeria.
He said: “This card will be configured to address the unique
ecosystem issues that we have to help improve payment system issues that we
have across the nation.”
“We also expect the card to provide affordable pricing,
adding that the charges will certainly be lower because it is expected to be
charged for in Naira as against foreign currency.
“NIBSS is a sharing infrastructure and the card central
management system will be shared and each integrating entity will integrate via
APR platform and we expect that other value addition will be mined and created
around this scheme.”
Oiwoh added: “It will support micro payment and credit,
e-government identity management, transportation, health sector and agriculture
in terms of payment”.
Essentially, the card will reduce the dependence on cash
along the landscape and help promote the cashless initiative driven by the
bank.
Oiwoh added that the operational effectiveness of this card
“is expected to be robust, and it should drive a lot of innovation,
standardisation, and full end-to-end visibility to improve fraud management and
better dispute resolution process around the card operating system”.