Carbon, the Nigerian digital bank, will resume issuing cards this month, six months after halting its card services. The decision followed changes to its card delivery system and rising customer demand, the company told TechCabal.
“Our international card provider was expensive and some of the processes were too cumbersome for the product we want to give our customers. We looked at the flaws in debit card usage in Nigeria and optimised the experience to make it better for customers and businesses,” a spokesperson for Carbon told TechCabal.
The fintech has refined its card collection and delivery system, one person familiar with the matter said. Fintechs, without branches, typically partner with logistic companies to deliver cards, which add costs to issuing costs priced in dollars.
Like many neobanks, Carbon began issuing cards to retain customers and drive transactions after obtaining its microfinance license. At the time, the fintech described cards as “a big step” in its transition from a lender to a licensed microfinance bank.
Despite the growing popularity of bank transfers, cards remain one of the most effective channels for customers to access their funds. For some, cards represent an easy option to access the cash in their accounts as Carbon operates without an agent network or physical branches.
“Offering cards is not about attracting new customers to Carbon; it’s more of an essential service we provide. It’s about providing convenience and retaining our customers,” the spokesperson said.
But, following rising dollar costs of issuing Mastercard and Visa cards and a change in consumer behaviour, most fintechs reevaluated their card operations. This reevaluation has boosted the popularity of Interswitch’s Verve card scheme, with the company issuing 17 million cards for Moniepoint and OPay. The Verve card faces competition from the central bank’s Afrigo card as both cards offer local costs and more accessible requirements.
For Carbon, which issued Visa cards, it preferred to discontinue its card operation and rethink its operations. The fintech declined to disclose its new card issuer.
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