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Tech & Processes

February 08, 2024

6 mins read

What's the point of card payments?

by Emmanuel Paul

Imagine this: You just walked into your favourite restaurant to grab lunch. You skipped breakfast, so you’re already salivating over the native rice you just ordered. It’s your turn to pay, and the cashier asks you a question you’ve heard a million times before: “Cash, card or transfer?”. 

If you’re like most Nigerians, the data suggests you’ll most likely whip out a card 8 out of 10 times. But the process might not always be smooth.  

Not all cards process smoothly

You just tried to pay, only to see "issuer or switch inoperative"? That's tech speak for "Oops, we can't reach your bank right now." Let's not start with the trouble you went through to get that card or what it will take to file a complaint if there’s a problem.  

Also, business owners experience issues when transactions fail, and the customer is debited. There are also problems with fraud. No one wants to have headaches in their financial experience.

To resolve some of these roadblocks, we launched a card service that works and lifts the burden for millions. 

I spoke to Damilola, the Technical Product Manager behind our card product, to find out why people love cards and how we smoothen the card payment process. He shared valuable nuggets. Let’s dive in with the first step. 

How do card payments work?


So you’re at the restaurant and decide to pay with your card. The entire process is quite complex, but let’s try to oversimplify what goes on behind the scenes.

The first player is the bank that gave you your card - the Issuer. The restaurant you’re eating at is the Merchant, and their bank is the Acquirer. Between the issuer and Acquirer is the payment gateway that captures the card details and sends them to a card processor. The processor then forwards the transaction details to the card network and issuing bank.

All this happens in seconds, and when you enter the right pin, the funds are earmarked for transfer. In most countries, the actual movement of funds to the merchant could take days, but Nigeria’s payment ecosystem has evolved to facilitate instant settlement of merchants. So the merchant gets credited for the native jollof, minus any charges from their acquiring bank or payment processor. Then you’re on your merry way.

The Cardolypse: Why cards are taking over. 

In 2023, a regulatory change by the Central Bank reshaped Nigeria’s payment space. Before then, people used cards mainly to withdraw cash to spend in shops. The events that followed turned lots of us into regular card users. Because even the regular tomato seller down the street now has a PoS terminal. Transactions at PoS shot up by 40.9% during this period! But it wasn't just about the cash scarcity. There’s more. 

In 2022 alone, Nigerians tapped, swiped, and entered PINs in a flurry of transactions—1.5 billion at ATMs and a staggering 3.9 billion at PoS terminals, cumulatively moving the economy with ₦73 trillion. So, there has to be some unspoken reason for this consistent increase in card usage. 

Banks within reach

The rise of mobile money in countries like Kenya and Ghana made banking accessible to millions of people. While services like Mpesa took over Kenya, agency banking became commonplace in Nigeria in the past few years. The former was mobile-driven, and the latter was card-driven. The ease and simplicity have contributed to the rise of card payments. You can read more about agency banking in this article. 

Millions of people are not tech-savvy

To do a bank transfer with an app or through USSD, you need either an Internet-enabled smartphone or the ability to read and write. However, smartphones are still expensive for most Nigerians, and literacy levels vary.

There’s a lot of friction involved with using banking apps

There’s even an added layer for literate people with smartphones. They’re extra careful with banking apps that are typically hard to use and don’t want to make any mistakes. Cards are straightforward. Insert, enter PIN, and done. 

Old habits look for the next best thing

People love cash because it’s fast; cards are nearly as fast, especially when cash is not within reach. There’s no waiting to confirm if the merchant has received the money. Of course, it’s a different story if you use Moniepoint’s pay-via-transfer feature, but that’s not the point of this story. Cards mimic the speed of cash, while offering the convenience and security of not carrying physical money. 

It’s a global trend.

Nigerians are not the only ones who love paying via cards. UK shoppers use credit or debit cards more than any other payment method. Cards account for 57% of shopping transactions in the UK. 

There are similar stories in the US and Brazil, as you’ll find someone using a debit or credit card for every two transactions. This number is 4 out of 10 in South Africa, another market where people love to pay by card. 

What we're doing differently.


With these few points of mine, I've shown you why cards are a big deal in Nigeria. Here’s how we’re making the card experience for millions of people despite all the bumps I mentioned above. 

Simplifying card deliveries

Imagine getting a new card faster than it takes to say, "Where's my card?" We promised customers a card in 48 hours and built a system to make that happen. Remember, when people face friction, it’s a massive barrier to financial inclusion, but simplifying the process brings more people to the financial sector. 

Fraud-proof systems

When there’s a fraud issue, it’s a headache for good-hearted people and businesses alike. 

We give customers complete control over their card details, starting from the card itself. We reduce the chances of identity theft by removing any details from the card.

The fear of being defrauded can make people lose trust in the financial system, and we work hard to make that yesterday’s story. 

Easy card control

From the app, users can prevent the card from being used at any channel they don’t want. Be it online transactions, PoS or ATMs. They also get to block the card at any time.

Here again, we stripped down the clumsy processes and moved card ownership from a burden to a tool for financial happiness. 

There you have it—we’ve shown how and why a simple piece of plastic is reshaping our financial landscape, making life a tad easier, one insertion at a time. So next time you're at the checkout and hear "Cash or card?" you'll know there's a story behind that simple choice. 

If this story excites you, you could help us make the magic happen. We're not just building a future where card payments are easier; we're crafting a world where everyone finds financial happiness. So, if you've got a knack for innovation and a heart for inclusion, click here to join the ranks.

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