CBN, NIBSS approves to introduce new card scheme next year

To enhance Nigeria's payment system, the Central Bank of Nigeria (CBN), Nigeria Inter-Bank Settlement Systems (NIBSS) Plc, and Bankers' Committee have jointly announced a new national card scheme. 

This was announced by Premier Oiwoh, Managing Director of NIBSS, on Thursday during a Bankers' Committee press conference. He said that the central bank was responsible for the project, that had already been approved.

The creation of this National Domestic Card system is one of the CBN's goals, along with improving efficiency and lowering operating costs for cards nationwide.

The new cards will assist in enhancing payment across the country, made specifically for the eco-system in Nigeria.

According to a statement by CBN spokesman Osita Nwanisobi, the initiative would boost financial inclusion and enable lower-cost payment services accessible to all Nigerians. He added that Nigeria is the biggest and most dynamic economy in Africa, and the rapid acceptance of digital financial services has been fueled by the CBN's constructive policy measures, the increase of mobile penetration, and the acceleration of digitisation and innovation.

The group also plans to provide locally produced content that is specifically tailored to the Nigerian context and will help identity management, e-government, transportation, micropayment and credit, alongside the health sector and agriculture in payment terms.

According to Oiwoh, the card was anticipated to lessen the need for cash across the country and support the CBN's cashless program.

The card's success is anticipated to be outstanding, which ought to spur significant innovation, standardization, and full end-to-end transparency to enhance fraud management and dispute resolution procedures related to the card operating system.

According to Nwanisobi, Nigeria is in a great position to successfully introduce a national card scheme given the size and resilience of its financial sector as well as the quick expansion and development of its payment infrastructure over the previous ten years.

The initiative, according to the apex bank, would enable banks to provide a wide range of options, comprising debit, credit, virtual, loyalty, and tokenized cards among others, in in addition to fostering development within the marketplace in Nigeria.

The CBN claimed that by introducing the scheme, Nigeria will emulate nations like India, Turkey, China, and Brazil in using this method to service the unbanked areas in their countries.

According to the statement, the CBN acknowledges the substantial advantages of launching Africa's first central bank-backed, domestic card scheme, which, if scaled up, has the capability of becoming the largest in Africa.

The bank also asserted that domesticating the card program will increase data sovereignty and allow for the creation of locally relevant products.

The CBN also claimed that domesticating the card initiative will increase data control, allow for the production of local goods and services, and lessen the need for foreign currency.

In Nigeria, Visa and Mastercard have monopolize the card payment industry. As a result, the introduced d omestic cards are anticipated to enhance the unbanked industry and boost competition within the payment ecosystem, even though they continue to be convenient, particularly for international payments.

Additionally, the cards should be able to lessen Nigeria's dependency on foreign financial services companies.

However, the central bank's direct market participation could stifle other players' innovation and market structure, which may stifle competitiveness.