The Nigerian fintech landscape is undergoing a significant shift, as companies move away from international card schemes like Visa and Mastercard in favor of local options like Verve and Afrigo. This shift is driven by a combination of economic factors, regulatory changes, and evolving consumer behavior.
Before the COVID-19 pandemic, issuing international debit cards was a popular strategy for fintechs to attract and retain customers. However, the pandemic, coupled with economic challenges, has led to a decline in card usage and an increased reliance on bank transfers.
To adapt to these changing circumstances, many Nigerian banks and fintechs have turned to local card schemes. These schemes offer several advantages, including lower fees, reduced regulatory burdens, and greater flexibility. By using local cards, fintechs can avoid the complex and costly processes associated with international schemes.
Furthermore, the rise of digital payments and the increasing popularity of bank transfers have reduced the need for traditional card payments. Fintech companies like Paystack are capitalizing on this trend by offering innovative payment solutions that prioritize bank transfers.
While the shift to local card schemes presents numerous benefits, it also raises concerns about potential limitations in terms of global acceptance and security. However, as the Nigerian fintech industry continues to evolve, it is clear that local solutions are gaining traction and shaping the future of payments in the country.
