The Chinese-backed FinTech Opay has issued 13 million Verve cards, while Moniepoint issued approximately 4 million.
This Verve initiative became popular with Nigerian financial institutions, since the end of the Covid-19 pandemic in 2021. At the moment, Verve is in control of over 56% of the debit card market in Nigeria.
The reasons for the card market reevaluation point towards the COVID-19 movement restrictions, the cash squeeze in Nigeria in 2023, and the rapid devaluation of the Naira. These issues have led to a fast acceptance of Verve cards by Nigerian banks over Mastercard and Visa.
Guaranty Trust Holding Company (GTCO) is the only bank not issuing the Verve cards. Banks, like First Bank, have issued the card scheme to over half of its card customers, according to a source.
However, changing from the international card schemes, which charge in USD indirectly makes foreign bills more expensive, restricting those few customers who shop online internationally from cheaper transactions.
“Majority of FinTech customers use cards for POS transactions. They are not shopping on Amazon or online stores outside Nigeria – the spokesperson at a Nigerian card scheme.
Another issue causing this change is that Nigeria is passing through its worst economic crisis in three decades, which is reducing the customer spending power, directly causing a decline in interchange (the fees merchants pay for card processing).
This is a problem for FinTechs as they require a high volume of transactions to become profitable with the cards. With the emergence of virtual cards, which enable online payments without the need for a physical card, issuing physical Mastercard and Visa cards will continue declining until it is no more.
The Central Bank of Nigeria under Godwin Emefiele launched a new local card scheme, Afrigo, intending to help banks save operational costs.
Fintechs are embracing this new card scheme as they are eager to get in the good books of regulators after a six-week ban from registering new customers.