Driving financial inclusion with Nigeria’s new multipurpose payment card

The federal government has declared the introduction of the much-awaited multi-purpose national payment card as one of the major policies that would shape the country in 2025. With an estimated 40 million population financially excluded, the government has touted the card as a solution. The introduction of the card, which has faced several delays, is […]

The federal government has declared the introduction of the much-awaited multi-purpose national payment card as one of the major policies that would shape the country in 2025.

With an estimated 40 million population financially excluded, the government has touted the card as a solution.

The introduction of the card, which has faced several delays, is set to help the government and its citizens streamline easy access to payment solutions in improving financial inclusion; access to government services, social intervention and digital identification.

Nigeria started the mainstreaming of its national database in 2014 with the issuance of the National Identity Number (NIN), which collates all individuals’ biometric and demographic identity data into one secure, digitally accessible number and has captured 110 million citizens by September 2024.

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While the NIN was produced with a temporary paper slip, the government has over the years struggled to provide permanent cards for citizens to carry along with them.

Ten years down the line, the government through the Nigerian Identity Management Agency (NIMC) announced plans to launch a permanent ID for citizens that have enrolled on the NIN.

But the NIMC seeks to build the proposed permanent card on a platform previously worked on by the Central Bank of Nigeria (CBN) and the Nigeria Inter-Bank Settlement System (NIBSS).

The NIBSS, which is a financial services company that maintains electronic payments and settlements between banks, discount houses, and card companies in Nigeria, and the CBN had in 2023 disclosed it was working on Nigerian National Domestic Card Scheme, known as AfriGo.

According to a former governor of the CBN, Godwin Emefiele, the card would help the country to deepen the national payments system through the use of electronic platforms.

He added that it would plug the gap identified during the introduction of the cashless policy, “and will integrate the informal segment of our economy, reduce shadow banking, bring more Nigerians into the formal financial services with an attendant diversification of deposit portfolio which will further strengthen the stability of the banking industry.”

Thus, among the functions of the card is to be a bedrock in the integration of more Nigerians into the financial system.

The AfriGo card

According to the NIBSS, the AfriGo card functions as a debit card and will be linked to the eNaira wallet of users and offers cheaper transaction fees; while the NIMC identified its features to include Biometric authentication, such as fingerprint and picture, to aid identity verification.

The offline capability that will allow transactions to be carried out in areas with limited network coverage; Machine-readable Zone (MRZ) for e-passport information in line with ICAO traveling standards; Banking details at the back of the card with chip and pin as well as Magnetic stripe enabled; and Nigeria quick response code (NQR) containing the national identification number. Contact and contactless.

While being used for identity and for all government interventions and services across multiple Ministry’s, Departments and Agencies (MDA), it is imbued with support for multiple wallets to process unique citizens across multiple programmes via 32-wallet application on the card.

Its capacity for both online and offline operations by identifying verification and transaction processing with or without real-time connectivity with a secured multi-factor authentication of PIN, fingerprint and facial recognition.

Enabled for all government social programmes: cash transfer, agricultural loans, student loans, health insurance scheme, micro contribution, micro pension etc. and its interoperability with existing payment systems makes it usable for ATMs, POS, mobile apps, and web-based payment gateways.

It also has a multicurrency function as users can gain cash, digital tokens, virtual wallets and eNaira through.

Nexus between Digital ID and financial inclusion

A report by the World Bank viewed Digital ID as potent in furthering the financial inclusion agenda as it makes it easier for the unbanked to open a transaction account in conjunction with simplifying documentation requirements.

It added that it enables more cost-effective customer onboarding that can be conducted remotely, contributing to financial inclusion.

It points out that ID systems that provide digital authentication services can help service providers carry out diligent requirements and expand the use of financial services.

Citing India’s Aadhaar system that enables agents equipped with point-of-sale devices to satisfy CDD regulations for bank accounts opening nearly-instantaneously by using just the Aadhaar number and authentication factor (e.g. a fingerprint or one-time password by SMS).

“One of the key components of financial inclusion strategies in many countries is to introduce a basic account—offered by either banks or non-bank entities—with stringent limits on the number of transactions and value of transactions. The objective behind the limitations is to prevent identity theft, financial fraud, money laundering and terrorist financing, while at the same time enabling access to transaction accounts.

“Inclusive digital ID systems address the lack of documentation to access financial services,” it noted.

Experts speak

A development economist, Aliyu Ilyas, described the initiative as a good idea to reduce corruption, tax evasion and help governments in terms of taking track of every Nigerian. He however emphasised the need for the government to provide necessary infrastructures before its commencement.

“I think before we even embark on it, we should ensure that we have good infrastructure that will take it, not that we will have it and we will start having issues. So, I think the infrastructure needs to be there, and it is good that it can work offline because most of us may not be in the area where there is an internet facility and we need to use it.”

Ilyas also called for a well-structured implementation as the country is known for its haphazard way of implementing policies.

While stating that it will definitely drive financial inclusion as there are lots of Nigerians with NIN, but don’t have bank accounts, he said there is a need to empower microfinance banks in these areas to keep the financial ecosystem functioning for access to cheap loans and not to rely on government handouts always.

On his part, a financial expert, Bashir Yahaya, noted that the federal government’s plan to launch the card as part of its strategy for financial inclusion may seem commendable on the surface, but it fails to address the root causes of financial exclusion in Nigeria.

“Financial inclusion cannot be achieved with quick fixes or cosmetic solutions when the real issues lie in the lack of income opportunities, limited formalised businesses, and inadequate financial infrastructure.  Financial inclusion starts with economic empowerment. Without sustainable job opportunities or a stable income, people are unlikely to engage with financial systems.”

This report is produced under the DPI Africa Journalism Fellowship Programme of the Media Foundation for West Africa and Co-Develop.