Banking
Debit Cards: Still Driving Financial Inclusion
The last decade witnessed tremendous changes in the nation’s banking landscape. The number of bank customers has grown, agency banking has gained a foothold and cheques have given way to transfers, particularly through SMS banking and mobile apps. Debit cards, however, remained a constant feature during this period.
Debit cards are financial instruments issued by commercial banks to their customers to enable seamless transaction outside the banking halls. Debit cards have proven reliable in banking and other financial transactions. It is today acknowledged as a viable tool in the quest to drive financial inclusion in Nigeria.
Financial inclusion refers to a situation by which individuals and businesses can access appropriate, affordable and timely financial products and services. These products and services include savings, credit, insurance, equity and pension.
The objective of financial inclusion is to capture the unbanked into the formal banking space and ensure the availability of more financial products to the underbanked. As the World Bank notes, access to a transactional account is the first step towards broader financial inclusion.
Several initiatives have been deployed by the Central Bank of Nigeria (CBN) to drive these financial inclusion objectives, especially payments. Debit cards have proven a critical tool in driving financial inclusion in emerging markets such as Nigeria.
While debit cards were at some points the exclusive preserve of a few, it is today almost ubiquitous. This is due largely to the pioneering efforts of Interswitch Group to place debit cards in the hands of many Nigerians with the introduction of Verve card.
Verve card is not just a domestic card with lower transactional fees, it is highly secure and tailored to cater to the market nuances. It is not surprising therefore that Verve quickly captured an appreciable portion of the market.
Inevitably, as more Nigerians added debit cards to their wallets, information and knowledge about financial services, payment patterns and transaction history emerged. Infrastructure and technology to support the usage also expanded with the deployment of more payment channels across the nation. Interswitch ensured that the Verve card was compatible with a majority, if not all of the payment channels.
Today, with a debit card, cardholders do not have to travel to their banks’ branches to carry out most of their financial transactions. With a debit card, cardholders can make cashless payments for their purchases at the point of sale and small scale business owners can build transaction history with which they can access credit facilities and scale their businesses.
The debit card can be incorporated to underwrite insurance policies and provide various cover to the cardholder. Pensioners can use their debit cards to access their periodic pension payments after retirement. In some cases, the debit card is used as a form of electronic identity (eID). It can be used to access grants, and agricultural resources such as fertilizers, equipment lease, seedlings, etc.
Undoubtedly, debit cards are an effective force in driving financial inclusion.
As debit card payment transaction success increased, cardholders’ confidence grew. Subsequently, it became easier to convince others to come into the formal banking space to enjoy the convenience that the cards offered.
Verve’s intervention in the payment card space proved a game-changer. It became commonplace to see the blue-collar worker and the white-collared counterpart on the same queue to use the ATM. It was no longer strange to see the driver and his boss making payments using PoS at the stores. In the financial services space, debit cards are revolutionary.
Figures on digital payment from the National Bureau of Statistics and the CBN for Q3 2020 showed that digital payment figures for the period was N320 trillion, with ATM transactions accounting for a big chunk of the total transactions. This is not surprising with the significant increase in the use of PoS, USSD and card-based web payments.
The debit card is an enabler. Verve card is a leveler. While the debit card has empowered people to carry out financial transactions seamlessly, the Verve card has ensured that this easy, convenient and secured way service offering came within the reach of all Nigerians, who desired it.
Yes, there is more to be done. The regulatory is on the right path with policies aimed at strengthening and deepening the efficiency of the nation’s e-payment system. New players are emerging and there is an increase in the issuance of cards, both debit and credit. It is clear, agency banking is on the rise, the number of touchpoints are increasing and options are growing. The future of cards, at this time, appears secure and bright.
By Aduragbemi Omiyale
The Central Bank of Nigeria (CBN) has reaffirmed that the old and new Naira notes will continue to be used for financial transactions in the country beyond December 31, 2024.
There had been rumours that the old and redesigned N200, N500, and N1,000 banknotes would no longer be legal tender from Wednesday, January 1, 2025, because the central bank would phase out the notes in compliance with a Supreme Court judgement of November 29, 2023.
But the apex bank, in a statement signed by its acting Director of Corporate Communications, Mrs Hakama Ali, on Friday, clarified that the apex court’s judgement being cited did not authorise the bank to phase out the banknotes by the end of this year.
According to her, the court allowed the CBN to leave the old and new notes to be used concurrently until it decides to gradually phase out the former.
The central bank’s spokesperson urged members of the public to disregard claims suggesting the old series of these denominations would cease to be valid at the end of this year.
She urged them to continue to accept all Naira notes for daily transactions, encouraging banks to also adopt alternative payment methods such as electronic channels to reduce the pressure on physical cash usage.
“The Central Bank of Nigeria (CBN) has observed the misinformation regarding the validity of the old N1000, N500, and N200 banknotes currently in circulation.
“In line with the bank’s previous clarifications and to offer further assurance, the CBN wishes to reiterate that the subsisting Supreme Court ruling granted on November 29, 2023, permits the concurrent circulation of all versions of the N1000, N500, and N200 denominations of the Naira indefinitely.
“For the avoidance of doubt, all versions of the naira, including the old and new designs of N1000, N500, and N200 denominations, as well as the commemorative and previous designs of the N100 denomination, remain valid and continue to be legal tender without any deadlines,” the statement noted.
By Adedapo Adesanya
Access Bank Plc, the banking subsidiary of Access Holdings Plc, has entered into a binding agreement with South African-based Bidvest Group Limited for the acquisition of 100 per cent equity stake in Bidvest Bank Limited.
The deal for the 24-year-old South African lender is due to be completed in the second half of 2025, upon regulatory approval.
This shows Access Bank’s further expansion plans in line with goals set by its late founder, Mr Herbert Wigwe.
The agreement to acquire 100 percent stake in Bidvest Bank reflects Access Bank’s commitment to strengthening its footprint in South Africa and consolidating on its position as the continent’s gateway to global markets as it seeks to optimise the benefits of recent acquisitions and accelerate its transition towards a greater focus on efficiencies.
Bidvest Bank, founded in 2000 is a niche and profitable South African financial institution providing a diverse range of services, including corporate and business banking solutions and diverse retail banking products.
As of its year ended June 2024, Bidvest Bank reported total assets equivalent of $665million and audited profit before tax of $20million.
Upon conclusion of this acquisition, Bidvest Bank will be merged with the bank’s existing South African subsidiary to create an enlarged platform to anchor the regional growth strategy for the SADC region.
This is coming just as the bank opened a new branch in Malta as part of efforts to focus on international trade finance after obtaining a banking licence from the European Central Bank (ECB) and the Malta Financial Services Authority (MFSA).
Access Bank said the licence marks a transformative milestone in bolstering Europe-Africa trade flows.
The Maltese branch was established by Access Bank UK Limited, the subsidiary of Access Bank Plc, which is also the subsidiary of Access Holdings Plc, which is listed on the Nigerian Exchange (NGX) Limited.
By Modupe Gbadeyanka
To strengthen Europe-Africa trade ties, Access Bank has opened a new branch in Malta. It will focus on international trade finance, employing approximately 30 people in its initial phase, with plans for controlled expansion over time.
It was learned that this Maltese branch was established by Access Bank UK Limited, the subsidiary of Access Bank Plc, which is also the subsidiary of Access Holdings Plc, which is listed on the Nigerian Exchange (NGX) Limited.
Access Bank Malta Limited commenced operations after obtaining a banking licence from the European Central Bank (ECB) and the Malta Financial Services Authority (MFSA).
Access Bank said the licence marks a transformative milestone in bolstering Europe-Africa trade flows.
Malta, a renowned international financial centre, and a gateway between the two continents, is strategically positioned to play a pivotal role in advancing commerce and fostering economic partnerships.
This strategic expansion into Malta enables The Access Bank UK Limited to leverage growing trade opportunities between Europe and Africa.
It underscores the organisation’s commitment to driving global trade, financial integration, and supporting businesses across these regions.
“By establishing operations in Malta, we will gain a foothold in a market that bridges European and North African economies, moving us one step closer to our goal of becoming Africa’s Gateway to the World.
“It further enhances our bank’s capacity to support clients with innovative solutions tailored to cross-border trade and investment opportunities,” the chief executive of Access Bank, Mr Roosevelt Ogbonna, stated.
“Europe has emerged as Africa’s leading trading partner, driven by initiatives such as the Economic Partnership Agreements between the EU and African regions and the African Continental Free Trade Area (AfCFTA).
“With Europe-Africa economic relations entering a new phase, The Access Bank Malta Limited is ideally positioned to deepen trade and meet the financing and banking needs of our clients in these expanding markets,” the chief executive of Access Bank UK, Mr Jamie Simmonds, commented.
Also speaking, the chief executive of Access Bank Malta, Renald Theuma, said, “Malta is uniquely positioned as a bridge between Europe and Africa, making it an ideal location for our subsidiary. This move allows The Access Bank Malta Limited to engage more closely with customers in Europe and deliver tailored financial solutions that drive growth and connectivity across both continents.”
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