The big news recently has been about the launch of AfriGo in Nigeria. This is a partnership between the Central Bank of Nigeria in collaboration with the Nigeria Inter-Bank Settlement Systems. The main idea behind the proposed collaboration is to create a national domestic card scheme that will rival the well-known global incumbents Mastercard and Visa.
Why would the Central Bank want to introduce a scheme like this? – Well, it is all part of their push for a cashless economy. In recent times the Central Bank of Nigeria has been experimenting with different ways in which to move the economy from a cash-dependant society to a cashless one with initiatives such as a digital central bank currency (e-naira) and an openness to new fintech launches.
What are the possible outcomes of such an initiative – one of the main ones will be a further push for financial inclusion, making card-based payments more accessible to a larger portion of the Nigerian population and ensuring downward pressure on associated fees by adding that extra competition to Visa and Mastercard.
Have we seen something like this before? – Actually yes, several countries have implemented a domestic card programme. Countries include China and India. India for example have the Rupay card.
One of the main highlighted benefits of launching a domestic card scheme is the ability to navigate the quite steep foreign exchange requirements that are requested by Visa and Mastercard and it also allows for more tailoring to be done for the Nigerian market itself. With Visa and Mastercard there is a global standardisation with a lot of their services that doesn’t allow for the nuances of individual countries.
With AfriGo, Nigeria hopes to really make great strides towards a cashless and financially inclusive society. It will be very interesting to see the uptake in the new card scheme.