CBN Begins Implementation Of National Domestic Scheme

In keeping with its mission to advance stability, inclusion, and growth in the financial and payment system, the Central Bank of Nigeria, CBN, has introduced a national domestic card program that will go into effect on January 16, 2023.

The Nigeria Inter-Bank Settlement System (NIBBS) program would bring the unbanked people into the financial system and unify payments in Nigeria, says the CBN.

A New Card Will Reduce Foreign Exchange Demand

The card is anticipated to compete with major companies in the market including Mastercard and Visa.

Osita Nwanisiobi, the director of corporate communications for the Central Bank of Nigeria (CBN), stated in October 2022 that it has become crucial to hasten the uptake of digital financial services because Nigeria is Africa’s biggest and most dynamic economy and because of the speed of digitisation and innovation, including the expansion of mobile access and proactive policy initiatives of the apex bank.

Nwanisiobi said: “Considering the strength and breadth of its banking sector and the rapid growth and transformation of its payments system over the last decade, Nigeria is ideally positioned to successfully launch a national card scheme. “Domesticating our card scheme also enhances data sovereignty, enabling the development of locally relevant products and services and reduces demands on foreign exchange.”

CBN Lists Functions Of The Card

The CBN spokesman also said the card could also be used as a platform to disseminate government-to-person payments and other social initiatives to enhance financial access and support the growth of a strong and inclusive digital economy, according to reports.

The card would be delivered via NIBBS, the country’s central switch system in partnership with the Bankers Committee and other industry players. “It will foster innovation within the Nigerian domestic market, while enabling African and international interoperability, allowing banks and other institutions to offer a variety of solutions including debit, credit, virtual, loyalty, and tokenized cards amongst others,” he said.

CBN To Reduce Dependence On Cash Transactions

Part of the plan is for the card to reduce dependence on cash transactions, improve fraud management and enhance dispute management around card operating systems, Premium Times said. The CBN said the card will incorporate products such as debit cards, credit cards, and non-interest cards, among others.

However, it could not be ascertained yet if Nigerians would be able to use it for international transactions as its application is for now restricted to local shores.