The last decade witnessed tremendous changes
in the nation’s banking landscape. The number of bank customers have grown,
agency banking has gained a foothold and cheques have given way to transfers,
particularly through SMS banking and mobile apps. Debit cards, however,
remained a constant feature during this period.
Debit cards are financial instruments issued
by commercial banks to their customers to enable seamless transaction outside
the banking halls. Debit cards have proven reliable in banking and other
financial transactions. It is today acknowledged as a viable tool in the quest
to drive financial inclusion in Nigeria.
Financial inclusion refers to a situation by
which individuals and businesses can access appropriate, affordable and timely
financial products and services. These products and services include savings,
credit, insurance, equity and pension. The objective of financial inclusion is
to capture the unbanked into the formal banking space and ensure the
availability of more financial products to the underbanked. As the World Bank
notes, access to a transactional account is the first step towards broader
financial inclusion.
Several initiatives have been deployed by the
Central Bank of Nigeria (CBN) to drive these financial inclusion objectives,
especially payments. Debit cards have proven a critical tool in driving
financial inclusion in emerging markets such as Nigeria.
While debit cards were at some points the
exclusive preserve of a few, it is today almost ubiquitous. This is due largely
to the pioneering efforts of Interswitch
Group to place debit cards in the hands of many Nigerians with the introduction
of Verve card. Verve card is not just a
domestic card with lower transactional fees, it is highly secure and tailored
to cater to the market nuances. It is not surprising therefore that Verve
quickly captured an appreciable portion of the market.
Inevitably, as more Nigerians added debit
cards to their wallets, information and knowledge about financial services,
payment patterns and transaction history emerged. Infrastructure and technology
to support the usage also expanded with the deployment of more payment channels
across the nation. Interswitch ensured that the Verve card was compatible with
a majority, if not all of the payment channels.
Today, with a debit card, cardholders do not
have to travel to their banks' branches to carry out most of their financial
transactions. With a debit card, cardholders can make cashless payments for
their purchases at the point of sale and
small scale business owners can build transaction history with which they can
access credit facilities and scale their businesses.
The debit card can be incorporated to
underwrite insurance policies and provide various cover to the cardholder.
Pensioners can use their debit cards to access their periodic pension payments
after retirement. In some cases, the debit card is used as a form of electronic
identity (eID). It can be used to access grants, and agricultural resources
such as fertilizers, equipment lease, seedlings, etc.
Undoubtedly, debit cards are an effective
force in driving financial inclusion.
As debit card payment transaction success
increased, cardholders’ confidence grew. Subsequently, it became easier to
convince others to come into the formal banking space to enjoy the convenience
that the cards offered.
Verve’s intervention in the payment card space
proved a game-changer. It became commonplace to see the blue-collar worker and
the white-collared counterpart on the same queue to use the ATM. It was no
longer strange to see the driver and his boss making payments using PoS at the
stores. In the financial services space, debit cards are revolutionary.
Figures on digital payment from the National
Bureau of Statistics and the CBN for Q3 2020 showed that digital payment figures for the period was N320 trillion, with ATM transactions accounting for a big chunk of the total
transactions. This is not surprising with the significant increase in the use
of PoS, USSD and card-based web payments.
The debit card is an enabler. Verve card is a
leveler. While the debit card has empowered people to carry out financial
transactions seamlessly, the Verve card has ensured that this easy, convenient
and secured way service offering came within the reach of all Nigerians, who
desired it.
Yes, there is more to be done. The regulatory
is on the right path with policies aimed at strengthening and deepening the
efficiency of the nation’s e-payment system. New players are emerging and there
is an increase in the issuance of cards, both debit and credit. It is clear,
agency banking is on the rise, the number of touchpoints are increasing and
options are growing. The future of cards, at this time, appears secure and
bright.
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