Nigerians Suffer as Banks Appetite for Foreign Cards Grow

ATMTHE fondness of Nigerian banks to persuade customers to settle for foreign card schemes at the detriment of locally grown schemes fuels an insidious and relegating effect on local efforts and the economy.

The banks come up with different excuses to force customers to settle for their chosen card schemes mostly foreign brand.
Card schemes are electronic payment card brands which banks issue to their customers for use in cash withdrawals at automated teller machine (ATM) as well as for payment at point of sale terminals (PoS).

The major cards schemes banks in the country issue include: Verve, MasterCard, Union Pay and Visa.
Our investigations revealed that some of the card schemes in desperate move to get volume offer some banks incentives to enjoy if they are able to issue their cards to a certain figure.

These incentives come in ways of marketing support or reduction in percentage of what the bank pays for the switching of the card.
Nigeria CommunicationsWeek gathered that in some cases the reward are given ahead to the banks on the agreement that they will achieve the volume at an agreed period, while failure to meet that volume means such reward will be withdrawn.

Charles Ifedi, managing director, Verve International an offshoot of InterSwitch, said he believes in value to the bank and value to the customer.

Where I have an issue is a situation a customer asks for a particular brand and you decline to present that brand. However, as more brands deliver expected values, they shall continue to be accepted by the banks and expands customers’ choice.

Meanwhile, it is the prerogative of the regulator which is CBN to determine who contravene its directive on providing customers the opportunity to choose. But if the deployment banks keep pushing more values into the market, like Verve is currently doing, the banks would not have option than to accept. Also, from the banks’ point of view, they would prefer to increase their international visibility or rating.”
“They believe that one way to achieve that is to partner a particular global brand; they rarely talk about value to the customer hence they have to deliver on that goal. Good as that may be I think banks should open it and allow customers to choose. They have to create more values to customers. At the same time, if a particular bank fails to satisfy the customer’s wish he is free to seek other bank’s attention. That is the essence of competition.” Ifedi added.

Tunde Ogungbade, managing director, Global Accelerex an electronic payment value added operator, said that apart from the consideration revealed, banks also consider cards schemes that have global outlook.

I will go for a card that I can use outside the shores of the country in choosing a card scheme”, he added. More so, greater percentage of cards issued by banks is for domestic use, and Interswitch owners of Verve the local brand has also entered into partnership with foreign brands for the card to be accepted in some countries.

He noted that global brands such as Visa and Mastercard have the economic power to invest and grow their brands locally in the country.
He added that the focus on Nigeria by these foreign brands is based on the recent report by Goldmine that gross domestic product (GDP) of Nigeria will be the highest by 2016.

1 Comment
  • Xanthos1

    but local cards are not usable on foreign merchant websites like Amazon…etc