In the past week, Interswitch announced that it has partnered with American Express (AmEx), the US multinational financial services corporation, to expand the usage and acceptance of the card, which is the world’s most accepted credit card.
This partnership will enable AmEx card members to transact using a wide range of merchants who process payments through Interswitch for a variety of expenses including for ATM withdrawals and website transactions nationwide.
For background, Nigeria’s journey to digital payment has been largely driven by cards (mostly debit and prepaid) with over 80M cards issued to customers, majority (close to 60%) being MasterCard.
There have also been concerted efforts by players to increase acceptance by bringing more merchants into the network and providing them tools to accept card payment. To be clear, this move by Interswitch is an acquiring play only, at least as far as we know. Interswitch will not be issuing American Express cards; you can recall that it has its own card network called Verve.
But generally, this is a great development in the following ways:
* Broadens international acceptance: many travelers (business and tourist) travel with Amex cards, so they will be able to use their cards in more places in Nigeria. Assumedly, the priority will be on the hospitality industry where travelers interact the most.
* Enables American Express to witness the potentials in the Nigerian market and may inspire them to open up issuance in the market, maybe in partnership with other fintechs.
* This could potentially drive volume for the merchant, through increased sales and acceptance. From this arrangement, Nigerian merchants will be integrated into the global American Express network, which means many more business opportunities and growth with an expected expanded user base.
* The partnership positions Interswitch as a leading financial technology company in Nigeria and strengthens American Express as a leading global network as well.
Today, more and more tech businesses are making connections globally with like-minded enterprises. Exciting collaborations of this magnitude truly accelerates the progress of the tech players in Nigeria, seeing as collaboration in so many ways drive innovation without the need for geographic proximity and helps in early adaptation of products and services to completely different markets.
It also fosters the identification of business needs that ordinarily may not have been appreciated in home markets. Sharing technology and market know-how will create ground breaking solutions, not just locally but overseas.