What to Know About CBN's National Card System

The Central Bank of Nigeria has announced that it will launch a National National Card Scheme on January 16, 2023.

The program will be launched through the Nigeria Interbank Settlement Systems (NIBSS) in partnership with the Committee of Bankers.

A statement from CBN Spokesperson Osita Nwanisobi said the program would accelerate financial inclusion and provide lower cost, more accessible and affordable payment services for Nigerians.

"Nigeria is Africa's largest and fastest growing economy and the pace of digitalization and innovation, along with expanding mobile phone penetration and proactive policy initiatives to CBN have driven the accelerated adoption of digital financial services,” he said.

"Given the strength and breadth of its banking sector and the rapid growth and transformation of its payments system over the past decade, Nigeria is uniquely positioned to successfully launch a national card system,” he said.

The bank said that in addition to driving innovation in the Nigerian domestic market, the program would enable banks to offer a variety of solutions, including debit, credit, virtual, loyalty and cash cards. token.

In launching the scheme, the CBN said Nigeria would join countries like India, Turkey, China and Brazil that have used this medium to serve underbanked areas within their jurisdiction.

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"The CBN recognizes the significant benefits of establishing Africa's first central bank-led national card system, which when rolled out at scale has the potential to become the largest in the world. 'Africa and one of the largest in the world'.

The bank also said domesticating the card system would further strengthen data sovereignty, enabling the development of locally relevant products and services and reducing currency demands.

HOW WILL IT WORK

The CBN has not provided full details on how the program will work. But a national national card should compete with Visa and Mastercard, the biggest players in the market.

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Visa and Mastercard have dominated the card payment market in Nigeria. While still convenient, especially for international transactions, domestic cards should better serve the unbanked market and increase competition in the payments landscape.

The cards are also expected to have the ability to reduce Nigeria's reliance on foreign-owned financial services companies.

But direct market participation by the central bank can disrupt market structure and innovation by other players. It can also crowd out the competition.

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