The Central Bank of Nigeria (CBN) with its newly launched Nigerian National Domestic Card scheme will prohibit payment of dollar charges on domestic transactions.
The CBN Governor, Godwin Emefiele, who launched the card virtually on Thursday morning, said the card would help to reduce operating costs, and charges and preserve foreign exchange in the country.
Emefiele said transaction charges on all cards would henceforth be paid in Naira, except for international transactions, adding that AfriGo would be cheaper and would be a matter of national pride, with the potential to boost financial inclusion.
No more dollar charges on the domestic card
- Emefiele said, “The National Domestic Card avails us the sovereignty of our data. Secondly, it comes at lower costs, and thirdly, the issue of foreign exchange.
- “At this time when foreign exchange challenges persist globally, it is important for me to say that we have come up with this card to ensure that all card online transactions will now effective immediately, begin to go on the Nigerian National Domestic System.
- “At some point in the next few weeks, I am sure that the CBN will come up with the cut-off. All domestic card transactions that will be conducted in Nigeria will have to be through Nigerian Domestic Cards.
- “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.
- “We will bar domestic charges from the Nigerian foreign exchange market at some point in the very near future.”
New card not targeted at international investors
The apex bank boss noted that the introduction of AfriGo was not an attempt to discourage international investors’ operations in the Nigerian payments space but that it had become necessary owing to its obvious advantages.
- He said, “This effort is not an attempt to prevent international service providers from continuing to provide services in Nigeria. Rather, it aimed at providing more options for domestic consumers, while also promoting the delivery of services in a more cost-effective and competitive manner.
- “The CBN is committed to a robust and safe payment system and welcomes innovations from domestic and foreign investors.
- “The Nigerian market is vast and the current participants have done so in the last 12 years to transform the ecosystem. Yet there is much ground to cover as millions of Nigerians are still without cards to consummate transactions.
- “I am convinced that the National Domestic Card scheme will make this a reality in the coming months. We can no longer neglect the vast majority of Nigerians.
For the record
The launching of the AfriGo card is coming 10 days behind the earlier scheduled time by the CBN.
- Recall that earlier in October 2022, the CBN announced that it would launch a national domestic card scheme on January 16, 2023.
- It said the scheme will be launched through the Nigeria Inter-Bank Settlement Systems (NIBSS) in partnership with the Bankers Committee, adding that it would accelerate financial inclusion and deliver lower-cost payments services that are more accessible and affordable for Nigerians.
- The apex bank said apart from fostering innovation within the Nigerian domestic market, the scheme would allow banks to offer a variety of solutions including debit, credit, virtual, loyalty, and tokenized cards amongst others.
- By launching the scheme, the CBN said Nigeria would join countries like India, Turkey, China, and Brazil which have used this means to service the underbanked areas in their jurisdiction.
- The Nigerian National Domestic card is expected to rival Visa and Mastercard, the market’s biggest players.
