Nigerian digital bank, Carbon, will resume its card issuance in November 2024, six months after suspending the service.
According to a local report, the decision was driven by improvements to its card distribution system and increased customer demand.
“Our international card provider was expensive and some of the processes were too cumbersome for the product we want to give our customers. We looked at the flaws in debit card usage in Nigeria and optimised the experience to make it better for customers and businesses,” the company said.
“Offering cards is not about attracting new customers to Carbon; it’s more of an essential service we provide. It’s about providing convenience and retaining our customers.”
Earlier this year [2024], Carbon made the decision to shut down its card operations with CEO, Ngozie Dozie, questioning if it was an effective strategy.
“When I take a step back with the benefit of hindsight (and a card operation bill denominated in USD $), I question why practically all neobanks are pushing cards or even getting into it. Was this the right strategy for ALL of us, or was Carbon just unlucky?” Dozie wrote in Substack.
FINTECH AFRICA | Carbon CEO Announces Shut-Down of Debit Card Operations in Nigeria
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The increasing dollar costs of issuing Mastercard and Visa cards, along with shifts in consumer behavior, led many fintechs to reassess their card operations.
Today, many fintechs in Nigeria, including Kuda, MoniePoint, and OPay, have introduced debit cards for their customers, in their case powered by Verve, Africa’s largest card scheme by Interswitch with acceptance in Nigeria, across Africa, Europe and America.
Verve cards are gaining popularity in Africa over MasterCard and VISA cards as Nigerian fintech companies prefer the local and easily accessible option. According to data published on Statista:
- Verve holds 54% of the Nigerian card market
- 30% of cardholders in Nigeria use MasterCard, and
- Around 18% have VISA cards
🇳🇬FINTECH AFRICA | Interswitch Verve Cards Outpacing MasterCard, VISA in Nigeria, Now With Over 50% Market Share
The decision to switch to local card schemes is also being attributed to customers’ use of cards for local payments. With spending power under pressure because of… pic.twitter.com/PVHOTIhZ16
— BitKE (@BitcoinKE) July 2, 2024
Carbon, in contrast, previously partnered with VISA, an international card provider, for its card offering. The fintech declined to disclose its new card issuer.
In early 2024, as reported by BitKE, Carbon acquired Vella Finance after it terminated its crypto services to focus on SME banking.
🇳🇬ACQUISITION | Nigerian Fintech, Carbon, Acquires Vella Finance and Launches AI-Powered SME Banking Platform 🇳🇬
Vella Finance, which last October [2023], as reported by BitKE, terminated its crypto services to focus on SME banking, will transition business customers to Carbon… pic.twitter.com/Xom2ldpxHi
— BitKE (@BitcoinKE) February 16, 2024
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