Fintech company PalmPay partners with Verve to launch their first local debit card, signaling a movement towards indigenous card schemes.
PalmPay Introduces Debit Cards, Embraces Local Payment Solutions
PalmPay, a leading Nigerian fintech with over 35 million users, has taken a significant step forward in its mission to cater to all Nigerian consumers by unveiling its first debit card in collaboration with Verve.
The debit card launch follows PalmPay's partnership with the national domestic card scheme, AfriGo, three weeks prior. This move signifies a strategic shift towards local card schemes like Verve, departing from global providers such as Visa and Mastercard.
PalmPay's debit cards will be offered in two versions: a standard option and a premium version tied to a new membership program. Premium members will enjoy up to 36% annual savings interest, compared to 20% for standard users.
The debit cards will be distributed through PalmPay's network of over one million agents across the country, ensuring easy access for all Nigerian consumers, including those without consistent phone access or who prefer online shopping.
Zab, from PalmPay, stated that not every user is a tech-savvy Lagosian, and some live in areas with limited phone access or prefer online shopping. This emphasis on catering to a broader demographic reflects the need for fintech companies to build services that cater to all Nigerian consumers, not just tech-savvy ones.
This shift towards local card schemes like Verve is primarily driven by strategic, regulatory, and economic reasons centered around national financial inclusion goals, cost efficiency, and sovereignty in payment infrastructure.
Financial Inclusion and Accessibility
Local schemes like Verve, supported by prepaid card systems, enable easier onboarding and financial access for the underbanked and unbanked population in Nigeria. They allow issuance without heavy documentation or bank accounts, helping fintechs reach a wider customer base in line with the Central Bank of Nigeria’s tiered KYC and cashless economy policies.
Cost Efficiency and Local Control
Using domestic card networks reduces reliance on international payment schemes, which often charge higher fees and control infrastructure. Verve allows fintechs to issue cards and process transactions locally, providing more control over the ecosystem and reducing transaction costs relative to Visa or Mastercard.
Regulatory and Strategic Policy Environment
Nigeria's fintech sector and government increasingly prioritize strengthening local payment rails for economic autonomy and improved liquidity circulation within the country. Although Verve has yet to achieve global status comparable to Visa or Mastercard, there's momentum to boost its adoption regionally and domestically with government encouragement.
Regional Integration and Technological Advancement
Verve is now interoperable with payment networks in other African regions (e.g., WAEMU countries via GIM-UEMOA), facilitating cross-border trade electronically with local card schemes, further expanding its appeal as a local solution.
Enhanced Consumer Incentives and Adoption Programs
Verve promotes cashless adoption through reward programs like the GoodLife Promo, which encourages user engagement and loyalty toward local schemes instead of global networks.
In summary, Nigerian fintechs prefer local schemes like Verve because they better align with Nigeria’s financial inclusion goals, reduce dependency on global networks, lower transaction costs, and are supported by emerging domestic and regional payment infrastructures and incentives. This shift reflects a broader global trend of countries seeking to strengthen their own digital payment ecosystems.
PalmPay aims to onboard millions of cardholders by the end of the year and plans to distribute five million contactless payment cards across Nigeria. This ambitious goal underscores PalmPay's commitment to expanding its services to cater to all Nigerian consumers, including those without consistent phone access or who prefer online shopping.
Meanwhile, other Nigerian fintechs like Carbon, HabariPay (a fintech arm of a large Nigerian bank), Opay, Moniepoint, and Paystack are also embracing local card schemes, further solidifying the trend towards domestic payment solutions.
- Venture capitalists may find opportunities in financing business ventures that leverage technology and local payment solutions, like PalmPay's debit card initiative, due to the strategic shift towards domestically controlled payment infrastructure in Nigeria.
- The growing trend among Nigerian fintechs, such as PalmPay, Carbon, HabariPay, Opay, Moniepoint, and Paystack, to embrace local card schemes like Verve for debit card offerings, suggests a potential venture capital investment focus in technology-driven finance businesses that prioritize financial inclusion and accessibility in emerging markets.
