2010 NIGERIAN DEBIT CARD CUSTOMER USAGE PATTERN

Just as Nigeria celebrated 50 years of independent nationhood on October 1, 2010, her financial services industry also witnessed the landmark completion of the migration of all its payment cards and terminals from magnetic to the more secure chip & PIN EMV platform.

The development has made Nigeria the first African country to achieve 100% EMV compliance. Earlier, the Central Bank of Nigeria (CBN) had ordered banks to stop accepting any transaction with magnetic stripe payment cards by September 30, 2010.

In compliance with CBN’s directive, most Nigerian banks de-activated their magnetic stripe cards, replacing them with chip & PIN cards. In retrospect, there were over 30 million magnetic stripe cards in circulation before the directive was issued.

However, the EMV migration has provided an opportunity for global payment brands such as MasterCard and Visa to gain footholds on the market hitherto dominated by local payment biggies, viz, Interswitch, eTranzact and Freedom Card.

As a result, most banks are now issuing MasterCard, Visa and Verve cards to replace the 30 million magnetic cards. Interswitch introduced Verve card while eTranzact released Genesis card to compete for market share with the global brands.

The responses of the bank customers to the CBN’s directive have been very encouraging, according to the feedbacks received from the DEBIT CARD

CUSTOMER USAGE PATTERN 2010 carried out by TinQTanQ, the research arm of financialtechnology publication.

Key findings included:

• 80% of bank customers surveyed said that they have replaced their old “ATM card” with the more secure chip & PIN EMV cards.

• 73% of bank customers surveyed said they feel more secure using the new chip & PIN EMV cards than when they were using the magnetic stripe cards.

• Over 74% of the respondents surveyed said they used their debit cards for only cash withdrawal on ATMs.

• Meanwhile only 14% of the respondents used their debit cards to make purchases on the web and top-up airtime either on the web, PoS or ATMs.

• 7% also used their cards for fund transfer from one bank account to another. However, only 4% of the survey has used their cards to make bill payments on touch points.

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