As part of efforts to curb dollar dominated charges payment cards used for local transactions, the Central Bank of Nigeria on Thursday launched the Nigerian domestic card.
The move is designed to ensure that Nigerians migrate from using international payment cards such as Master Card, Visa Card, as soon as possible
The apex bank said the initiative will help integrate the informal sector of the economy, reduce shadow banking as well as bring more persons into the formal banking system.
Speaking at the virtual launch of the initiative, CBN governor, Godwin Emefiele, listed the challenges of financial inclusion in the country to include high cost of card services due to the payment of international cards in dollars, in addition to the inability of existing card products to address peculiarity of the Nigerian local market.
Emefiele said the launch of the domestic card scheme would ensure rapid expansion of card payment in the country.
He noted that despite record growth in the card payment system over the years, many Nigerians were still excluded.
The CBN governor said given the limited usage of cards by Nigerians and in a bid to deepen penetration, the banks actively promoted the national domestic card scheme which would be accessible to all Nigerians and also cater to local peculiarities.
Transaction charges on all cards would, henceforth, be paid in naira, except for international transactions.
“The national domestic card gives us the sovereignty of our data. Secondly, it comes at lower costs, and thirdly, the issue of foreign exchange. Ladies and gentlemen, at this time when foreign exchange challenges persist globally, it is important that I say that we have come up with this card to ensure that all online transactions will now immediately begin to go on the Nigerian national domestic card system.
“At some point in the next few weeks, I am sure that the CBN will come up with the cut-off. All domestic transactions that are going to be conducted in Nigeria will have to be through the Nigerian domestic cards,” he said.
However, despite the introduction of the domestic payment card, Nigerians are still at liberty to continue the use of existing payment cards in the country for transactions, according to Emefiele.
“Your existing cards are fine. You can continue using them but given that charges by foreign cards are in dollars, we will no longer pay dollars for the charges on those cards.
“We will only pay dollars for charges on transactions that are done outside Nigeria. NIBSS, the CBN, and Nigerian banks will work together to see how to segregate those transactions to ensure that we pay fees or charges for international transactions that are conducted on both domestic cards, Visa or Master Cards, as they are known today.
“I thought it important for me to say so not because there’s any preference for the domestic card but what is most important is that we do not have foreign exchange and we will bar payment of charges for domestic transactions from the Nigerian foreign exchange market at some point in the very near future,” he stressed.
On his part, managing director, NIBSS, Premier Oiwoh, said the scheme was developed to promote a robust in-country domestic card payment scheme tailored to address the specific requirements of Nigeria’s payment industry.