CBN Unveils National Card Scheme To Eliminate Dollar Charges On Domestic Transactions
The Central Bank of Nigeria (CBN) has launched the Nigerian national domestic card scheme in order to strengthen the country’s electronic payment system.
The Nigerian national domestic card scheme is an initiative to improve the country’s payment landscape. The card would help to reduce operating costs and charges while also preserving foreign exchange in the country.
The CBN governor, Godwin Emefiele, said at the initiative’s virtual launch ON Thursday, that the domestic card scheme would provide opportunities to integrate the informal sector of the economy, reduce shadow banking, and bring more Nigerians into the formal financial system.
While the penetration of card payments in Nigeria has increased dramatically over the years, he claims that many Nigerians remain excluded.
According to Emefiele, the country’s financial inclusion challenges include the high cost of card services due to foreign exchange requirements of international card schemes, as well as the inability of existing card products to address local market peculiarities in Nigeria.
Given the limited use of cards by Nigerians, the CBN governor stated that banks actively promoted the national domestic card scheme, which would be accessible to all Nigerians while also catering to local peculiarities.
He also stated that, with the exception of international transactions, all card transaction fees would now be paid in naira.
“The national domestic card grants us data sovereignty. Second, it is less expensive, and third, there is the issue of foreign exchange, Emefiele said.
“Ladies and gentlemen, at this time when foreign exchange challenges persist globally, it is important that I say that we have developed this card to ensure that all online transactions will now, effective immediately, begin to go on the Nigerian national domestic card system.”
“At some point in the next few weeks, I am sure that the CBN will come up with the cut-off. All domestic transactions that are going to be conducted in Nigeria will have to be through the Nigerian domestic cards.”
Emefiele also said Nigerians could continue to use the existing payment cards in the country for transactions.
“Your existing cards are fine. You can continue using them but given that charges by foreign cards are in dollars, we will no longer pay dollars for the charges on those cards,” Emefiele explained.
“We will only pay dollars for charges on transactions that are done outside Nigeria. NIBSS, the CBN, and Nigerian banks will work together to see how to segregate those transactions to ensure that we pay fees or charges for international transactions that are conducted on both domestic cards, Visa or Master Cards, as they are known today.
“I thought it important for me to say so not because there’s any preference for the domestic card but what is most important is that we do not have foreign exchange and we will bar payment of charges for domestic transactions from the Nigerian foreign exchange market at some point in the very near future.”
Also speaking at the event, Premier Oiwoh, managing director of NIBSS, said the scheme was developed to promote a robust in-country domestic card payment scheme tailored to address the specific requirements of Nigeria’s payment industry.
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