Nigerian digital bank Carbon, which also holds a microfinance banking licence, will resume issuing debit cards to its customers in November, after a six-month break.Β
In June, Carbon announced to its over 3 million customers that it will stop issuing cards. At the time, we reported on the financial logistics and expenses it would cost to issue physical cards to customers, given that most of these fintechs in Africa typically have to partner with international card scheme giants like Mastercard and Visa.
The processes are often cumbersome; these startups earn in naira, so they typically have to pay partnership and agreement fees with these processors in dollarsβlosing money in the forex.
Yet, the pause has likely allowed Carbon to restrategise on the details, pick a cost-efficient provider, and overhaul its card delivery system.
βWe looked at the flaws in debit card usage in Nigeria and optimised the experience to make it better for customers and businesses.β
Though Carbon declined to name its new card partner, there are speculations that the fintech will opt for local card payments upstart, AfriGo, that is co-owned by the Central Bank and the Nigeria Inter-Bank Settlement System (NIBSS).
In banking, tier-2 bank Stanbic IBTC will also soon start rolling out AfriGo cards.
The fintech startup has stated that it considers cards as a customer retention tactic. As of 2022, 1 in 3 Nigerians above the age of 15 use debit cards, despite the growing adoption of e-payments.
As banks led the introduction of cards, fintechs have likely associated them with trust. Given their limited physical presences to adopt the move-fast DNA fintechs are known for, low-trust Nigerians have still not learned to put all their money into a fintech. Yet, one poser lingers on our minds: what is Carbonβs new play to make its card distribution process cost-efficient?
