The Central Bank of Nigeria (CBN) on Thursday, in conjunction with the Nigeria Inter Bank Settlement Systems (NIBSS) Plc, the Bankers Committee and other financial ecosystem stakeholders, launched the National Domestic Card Scheme in a virtual event.

The move comes amid Nigeria’s forex crisis that has seen banks suspending international POS and ATM services. It is also in the era of fintech boom, which has birthed a plethora of cross-border payment systems that have become preferred payment options over the traditional banking system. Those have put the central bank on its toes to find innovative ways of preserving the nation’s conventional payment system and to tame the raging forex crisis.

The new domestic card scheme, dubbed AfriGo, is said to have a robust in-country system tailored to address the specific requirements of Nigeria’s payment industry. It is also built with innovative offerings designed for the Nigerian market and others.

Gracing the event were representatives of multilateral agencies, Switches and Processors, Payment Service Banks, Mobile Money Operators, Payment Terminal Service Providers, Payment Solutions Service Providers, card manufacturers and industry associations.

A statement about the scheme said it would transform the domestic and African payment landscape through the promotion of innovation in payment and enhancement of interoperability domestically and internationally. It will also improve the suite of products and solutions offerings by banks and other financial institutions such as debit, credit, virtual, loyalty and tokenized cards.

The statement added that the National Domestic Card, which is set to be delivered to over 200 million Nigerians, offers unique value propositions through enhanced data sovereignty and transaction security, better pricing opportunities, reduced demand for forex, enhanced financial access and support of the growth of a robust and inclusive digital economy, amongst others.

“The launch of this historic Scheme presents a new dawn in the Nigerian payment ecosystem and unveils the unique opportunities presented by the Nigerian retail landscape. It is indeed the beginning of a new era, charting the future of the payment landscape as the first Domestic Card Scheme to be launched on the African continent,” the statement said.

Following the launch, the CBN said existing card schemes in the country will be nullified in due time. The apex bank said it will set a deadline that will make other card schemes invalid for domestic transactions.

“With the implementation of the National Domestic Card Scheme, the industry will reap potential benefits which include improved transaction security, better pricing opportunities, reduced demand for FX and less pressure on the Naira, locally relevant partnerships and offerings developing local skills in card and payment space,” the Deputy Governor of CBN and Chairman of NIBSS, Aisha Ahmad, said.

“Other advantages include a boost to financial inclusion, value retention, flexible and innovative scale, source of national pride,” she added.

The CBN governor Godwin Emefiele said after the launch; “all domestic transactions that are going to be conducted in Nigeria will have to be through the Nigerian domestic cards.”

The card scheme is expected to ease Nigeria’s reliance on foreign exchange for international transactions.

“At some point in the next few weeks, I’m sure that the CBN will come up with the cut-off,” Emefiele said, talking about deadline for existing card schemes. “We will no longer pay dollars for those cards, for the charges on those cards.”

He said with the AfriGo card, Nigeria has joined countries like China, Russia, Turkey, and India which have their local cards.

Nigerians are facing difficulty accessing the new naira notes as Automated Teller Machines (ATMs) across the country remain empty, even as the deadline given by the Central Bank of Nigeria (CBN) for the old naira notes to cease to be legal tender nears.

This is coming on the heels of the CBN’s reaffirmation that the January 31 deadline will not be extended. The central bank had issued ATM-only withdrawal ultimatum to the banks, among other measures, as a way of ensuring adequate circulation of the new naira notes across the country.

However, the ultimatum has failed to curtail the scarcity of the redesigned naira notes. Some bankers said there is not enough supply of the new N200, N500 and N1,000 naira notes, leaving them with to either issue the old naira notes or leave the ATMs empty. With the latter becoming their choice, the circulation of the new naira notes has been significantly undermined.

This is despite the CBN’s claim that there is enough of the redesigned naira notes to go round, threatening to sanction any bank caught hoarding the new notes.

”The CBN has massively supplied the new notes to commercial banks to dispense both at counters and ATMs.

”This is to enable quick circulation and we want to advise commercial banks to desist from keeping the cash away from the public or face the stiffer sanction,” Musa Jimoh, Director of the Payment System Management Department of the CBN, said in Jos.

Against the backdrop of the new naira notes scarcity, there is a growing belief that the CBN is deliberately creating artificial scarcity as a mechanism to tame Nigeria’s wild inflation.

The CBN governor Godwin Emefiele had decried the amount of naira in circulation in the country. He said after the Monetary Policy Committee held on Tuesday, where interest rate was once again reviewed upward to 17.5%, that some persons have been hoarding the naira, causing the circulation to rise from N1.4 trillion to N3.2 trillion in seven years.

The scarcity of the new naira notes despite assurances by the apex bank that there is enough to satisfy the need, is thus seen as part of efforts to limit the amount of cash in circulation while mopping up the excess old naira notes already in circulation.

However, the situation is creating a fresh facet of hardship that is poised to add further misery to the lives of the Nigerian public.

“It is a fact that you can do the right thing in the wrong way. How else do you explain the stubbornness of the CBN Governor. If this arbitrary deadline is not extended; there will be so much hardship and pain the people will revolt. Why is it so hard to apply common sense,” Dr Charles Omole, a security expert lamented.

With Nigeria’s push for a cashless economy still in cradle, Nigerians rely mostly on cash transactions. This backdrop means that the informal sector will likely see the impact of the redesigned naira notes doubled. Commuters are lamenting that lack of cash in ATMs is keeping them stranded. In addition, people who have deposited their old naira notes don’t have cash to buy the things they need.

It is not clear who, between the banks and the CBN, is telling the truth about the scarcity of the new naira notes. But the central bank is yet to sanction any bank for not making the new naira notes available in ATMs, a development many have pointed at as a sign of culpability.

Congratulations Governor Sanwo-Olu of Lagos State. Congratulations to the good people of Lagos State. At Touch and Pay Technologies Ltd (YC W22), we are very honoured that Nigeria’s center of excellence has unveiled a world class rail system, and our technology is powering all aspects of the payment. We thank all Lagosians for the opportunities; we appreciate the state’s leadership vision for using the home team.

We began with BRT buses, we did very well, and the state promoted us to the railway system. We will continue to work hard to make sure when it is time for the rocket and moon voyage, Lagos will choose TAP and Cowry Card. Billing for the moon, we understand, because we think big.

To Micheal, Kabiru, Ogo and Olamide, congratulations for executing and building the fastest growing company in Africa. Yes, from less than 1,000 users to 3 million in about three years. Tekedia Capital stands with innovators and we appreciate the uncommon quality and execution all have done.

To other states in Nigeria and countries in Africa (states like Kano and countries like Senegal are on board), TAP is the leader in microtransaction payment, making it possible to collect as low as 50 naira, 100 naira  (think of digitizing collection of 10 US cents). As we do that, we offer revenue assurance. Yes, no leakage assured! Lagosians, travel, move, etc – use your Cowry card!

Connect with Afolabi Olamide if you want a demo in your state or country. You can also email my team here capital.tekedia.com for an email introduction with the TAP team.

Bus Payment

Bus owners voted it the most important technology of 2022 in Nigeria. Why? No more leakage of revenue. No snake swallowing Naira. No agbero took our money. No “it rained sote” in Lagos that customers did not ride. Once your bus is onboarded, you can set the system so that every 5 (10, 60, etc) minutes, your phone will get an update on how much money the bus has made.

If you are a bus owner, Touch and Pay Technologies Ltd (YC W22)’s Cowry Card is the largest transport payment network in Africa , supporting thousands of users daily.  It is a closed card system which means it does not require a telco network and it works 100% of the time (no network issue, no my bank server is down, etc). It was engineered with the Nigerian and African terrain in mind.

TAP is a Tekedia Capital portfolio company. Connect with Afolabi Olamide and get your bus enrolled. You can also email my team here capital.tekedia.com to link you with the TAP team.

Many questions on TAP technology. Not everyone needs a card . This is how to digitize your restaurant business, garri store, etc. Just give the customer associate the device, as people pay even with cash, a receipt will be issued. Provided that receipt is issued, your revenue will not leak. No need to imagine: ask the team to create a solution for your use case. The system does not need any network as it is a closed system. There is a reason TAP grew from 1,000 users to 3 million in three years, the product is hyper-local. No foreign company can do what our team did because they will not understand the cases. Connect at Tekedia Capital capital.tekedia.com for a demo.

No Cash for Payment in Nigeria

We did not cause the paralysis which is happening with lack of cash in Nigeria. But if you are a merchant, there is a solution. Touch and Pay Technologies Ltd (YC W22) Pay since inception has focused on microtransactions, making it possible for people to digitize collections of N10, N20, etc. Also, the technology does not fail as there is nothing like ”there is no network”.

From Danfo drivers to restaurants to akamu sellers to anything,  the TAP team is expanding networks to support merchants and sellers. This is not a POS, this is TAP which does not require any network in any way.

Contact my team at Tekedia Capital for us to connect you with our portfolio company team. We have won the victory over lack of cash in Nigeria! Afolabi Olamide is here to support your business.