In order to accommodate new entrants into the digital banking industry, the deployment of point of sale (PoS) machines will increase in the upcoming months.
Despite difficulties, a large number of cardholders, particularly those at the grassroots, who had previously been wary about digital banking and the security of their assets, are embracing the program.
As more people take use of the digital payment option, the Central Bank of Nigeria (CBN) anticipates that PoS deployment and use will increase in the upcoming months.
According to analysts, mobile banking and PoS services have long dominated the digital banking industry. They are all a part of the digital banking network, a new path taken by regulators and financial service providers to provide seamless services to the banked and encourage the unbanked and underbanked to join the financial services network.
Cardholders have, however, recently experienced poor network connectivity and transaction failures that take weeks or months to fix.
Major networks and institutions are experiencing problems with the Unstructured Supplementary Service Data (USSD), which for years predominated the payment sector.
Support for cardholders is anticipated as a result of the agreement between the Central Bank of Nigeria (CBN) and Nigeria Inter-Bank Settlement Systems (NIBSS) Plc to launch the National Domestic Card Scheme for the Nigerian market.
The action is in line with the CBN’s mission to advance the financial and payment system’s stability, inclusiveness, and growth.
The debut date for the card program is January 16, 2023.
Osita Nwanisobi, the CBN’s director of corporate communications, said in a statement that the CBN’s aggressive policy actions had sped up the adoption of digital financial services in Nigeria.
According to him, the central switch of Nigeria, Nigerian Inter-Bank Settlement Systems (NIBSS) Plc, will deliver the national domestic card program alongside the Bankers Committee and other participants in the financial ecosystem.
“It will foster innovation within the Nigerian domestic market, while enabling African and international interoperability, allowing banks and other institutions to offer a variety of solutions including debit, credit, virtual, loyalty and tokenized cards amongst others,” he said.
“Considering the strength and breadth of its banking sector and the rapid growth and transformation of its payments system over the last decade, Nigeria is ideally positioned to successfully launch a national card scheme,” he said.
According to him, Nigeria’s economy is still the most dynamic in Africa, benefiting from the rapid speed of innovation and digitization as well as rising mobile penetration.
“Building on this platform to accelerate financial inclusion requires infrastructure that can deliver lower cost payments services that are more accessible and affordable for Nigerians. Domesticating our card scheme also enhances data sovereignty, enabling the development of locally relevant products and services and reduces demands on foreign exchange,” he said.
According to Nwanisobi, the program can also be used as a platform for the seamless distribution of government-to-person payments and other social impact programs, improving financial access and fostering the development of a strong and inclusive digital economy.
“Nigeria joins a growing list of countries – India, Turkey, China, and Brazil as leading examples – which have launched domestic card schemes and harnessed the transformative benefits for their respective payments and financial systems, particularly for the underbanked,” he said.
“The CBN recognizes the significant benefits from delivering Africa’s first central bank-driven, domestic card scheme, which, when delivered at scale, has the potential to become the largest in Africa, and one of the largest in the world”.
