In many African countries, access to financial services is limited, and many individuals do not have bank accounts or access to traditional financial institutions. This has led to a large unbanked population and a reliance on informal financial systems.
The Central Bank of Nigeria (CBN), in collaboration with other top financial institutions in Nigeria, is planning to change this by the introduction of unified ATM cards. CBN and the Nigeria Inter-Bank Settlement System (NIBSS), including the Bankers Committee, will float a national card scheme to enhance the payment system in Nigeria.
Could this be a possible way to help reduce the number of the unbanked in Africa. Unified ATM cards are definitely one way to increase access to financial services in the continent. These cards allow individuals to access multiple types of accounts, such as checking savings, and credit accounts, using a single card. This can be especially beneficial for those who may not have the means to open multiple bank accounts.
In Nigeria, the CBN spokesman, Osita Nwanisobi, said that Unified ATM cards are meant to promote inclusion and growth in the financial services sector via Nigeria’s central switch system, NIBSS. Nwaniso added that the scheme will become effective in January 2023. With the introduction of the card, Nigeria joins a growing list of countries such as India, Turkey, China, and Brazil as leading examples – which have launched domestic card schemes and harnessed the transformative benefits for their respective payments and financial systems, particularly for the underbanked.
“The CBN recognises the significant benefits from delivering Africa’s first central bank-driven, domestic card scheme, which, when delivered at scale, has the potential to become the largest in Africa, and one of the largest in the world,” Nwanisobi said.
The card will be configured to manage the payment ecosystem and improve payment across Nigeria. It will also provide affordable pricing. Charges on the card will be lower because it will be charged in Naira and not in foreign currency. The card would be optimised for local content solely for the Nigerian market and support micropayment and credit, e-government, identity management, transportation, health and agriculture regarding payment.
Unified ATM cards can also help to increase financial inclusion by allowing individuals to easily access cash and perform other financial transactions at ATMs. This can be particularly important in rural areas where access to traditional financial institutions may be limited.
In addition, unified ATM cards can also be used for point-of-sale transactions, online transactions, and other types of financial transactions. This can help to increase the convenience and accessibility of financial services for individuals and businesses.
Overall, unified ATM cards have the potential to greatly improve financial inclusion in Africa by making it easier for individuals to access financial services and perform financial transactions. This can help to promote economic growth and stability, and can also help to reduce poverty and inequality.
The need for unified ATM cards in Africa is driven by the fact that many people in the continent don’t have access to traditional financial services, and these cards can help to increase access to financial services, promote financial inclusion and economic growth in the region.