The Cards and Payments Industry in Nigeria: Emerging Trends and Opportunities to 2020

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Published: March 30, 2017 Report Code: VR1207MR-ST

Report Overview
Key Players
Table of Contents
Table
Figures

GlobalData’s "The Cards and Payments Industry in Nigeria: Emerging Trends and Opportunities to 2020" report provides top-level market analysis, information and insights into the Nigerian cards and payments industry, including –
– Current and forecast values for each market in the Nigerian cards and payments industry, including debit and credit cards.
– Detailed insights into payment instruments including credit transfers, checks and payment cards. It also, includes an overview of the country's key alternative payment instruments.
– E-commerce market analysis.
– Analysis of various market drivers and regulations governing the Nigerian cards and payments industry.
– Detailed analysis of strategies adopted by banks and other institutions to market debit and credit cards.
– Comprehensive analysis of consumer attitudes and buying preferences for cards.
– The competitive landscape in the Nigerian cards and payments industry.

The report provides detailed analysis of market trends in the Nigerian cards and payments industry. It provides values and volumes for a number of key performance indicators in the industry, including credit transfers, checks and payment cards during the review period (2012–2016).

The report also analyzes various payment card markets operating in the industry, and provides detailed information on the number of cards in circulation, transaction values and volumes during the review period and over the forecast period (2016–2020). It also offers information on the country's competitive landscape, including the market shares of issuers and schemes.

The report brings together GlobalData’s research, modeling, and analysis expertise to allow banks and card issuers to identify segment dynamics and competitive advantages. The report also covers details of regulatory policy and recent changes in the regulatory structure.

The Nigerian payment cards market is anticipated to slow down, as a result of a ban imposed by the Central Bank of Nigeria (CBN) in December 2015 on the use of debit and credit cards abroad, and on transactions denominated in foreign currencies. This prevented Nigerian consumers from using cards to make purchases during overseas travel, or from foreign e-commerce sites. However, following a severe consumer backlash, the ban was partially revoked in January 2016, with banks enabling consumers to use foreign exchange services, but with limits on transaction values. In January 2016, for instance, GTBank permitted customers to transfer foreign currency via online banking, its mobile app, or at any branch nationwide, subject to a daily limit. Similar restrictions were imposed by other banks, such as First Bank of Nigeria and Sterling Bank. Yet again, with the escalating foreign exchange crisis, in October 2016 GTBank, Standard Chartered Bank Nigeria and Stanbic IBTC Bank suspended use of payment cards abroad and for online transactions.

While banks in Nigeria still focus on traditional bricks-and-mortar branches to deliver services, SunTrust Bank launched a mobile-only bank in 2016, allowing consumers to conduct transactions purely by mobile phone. Another digital bank, Lidya, was introduced in 2016; it offers an online platform for consumers to open bank accounts, access credit and save money. Furthermore, the bank aims to partner with other bricks-and-mortar Nigerian banks to provide an online platform to small and medium-sized businesses (SMEs). The advent of mobile-only banks is likely to accelerate a shift towards electronic payments in Nigeria.

Alternative payments that offer security and convenience are gradually gaining prominence in Nigeria, with banks and payment solution providers launching services. The latest of these is the launch of MasterPass by Mastercard in association with Ecobank in 2016. Similarly, Visa and Nigeria-based technology company JORG Technologies launched mVisa and Nairabox respectively in the same year. Other alternative payments available in the market include PayAttitude by six banks: UBA, Access Bank, FirstBank, Zenith Bank, Skye Bank and Diamond Bank, Verve World and PayPal.

Scope

– This report provides a comprehensive analysis of the Nigerian cards and payments industry.

– It provides current values for the Nigerian cards and payments industry for 2016, and forecast figures to 2020.

– It details the different demographic, economic, infrastructural and business drivers affecting the Nigerian cards and payments industry.

– It outlines the current regulatory framework in the industry.

– It details marketing strategies used by various banks and other institutions.

Reasons to Buy

– Make strategic business decisions, using top-level historic and forecast market data, related to the Nigerian cards and payments industry and each market within it.

– Understand the key market trends and growth opportunities in the Nigerian cards and payments industry.

– Assess the competitive dynamics in the Nigerian cards and payments industry.

– Gain insights into marketing strategies used for various card types in Nigeria.

– Gain insights into key regulations governing the Nigerian cards and payments industry.

UBA
FirstBank
GTBank
Access Bank
Ecobank
Interswitch
Visa
Mastercard

Table of Contents

EXECUTIVE SUMMARY 2

1.1. Market overview 2

1.2. Key facts 4

1.3. Top five industry events 5

2. PAYMENT INSTRUMENTS 11

2.1. Current payment environment 11

3. E-COMMERCE AND ALTERNATIVE PAYMENTS 13

3.1. E-Commerce market analysis 13

3.2. Alternative payment solutions 15

3.2.1. Paga 15

3.2.2. PocketMoni 15

3.2.3. PayPal 16

3.2.4. Verve World 16

3.2.5. Nairabox 16

3.2.6. Fortumo 16

3.2.7. MasterPass 16

3.2.8. mVisa 17

3.2.9. KongaPay 17

3.2.10. PayAttitude 17

4. REGULATIONS IN THE CARDS AND PAYMENTS INDUSTRY 18

4.1. Regulatory framework 18

4.1.1. Payment System Vision 2020 (PSV2020) 18

4.2. Anti-money laundering and counter-terrorism financing (AML/CTF) 19

4.3. Foreign direct investment (FDI) regulations 20

5. ANALYSIS OF CARDS AND PAYMENTS INDUSTRY DRIVERS 21

6. PAYMENT CARDS 24

7. DEBIT CARDS 27

7.1. Debit cards market analysis 27

7.2. Competition in the debit cards market 29

7.3. Debit cards comparison 31

8. PAY LATER CARDS 32

8.1. Pay later cards market analysis 32

8.2. Competition in the pay later cards market 34

8.3. Pay later cards comparison 36

9. APPENDIX 37

9.1. Abbreviations 37

9.2. Supplementary data 38

9.3. Definitions 45

9.4. Common payment card features 46

9.5. Methodology 47

9.6. Bibliography 49

9.7. Further reading 49

Table

List of Tables

Table 1: Nigeria, Key Facts, 2016 4

Table 2: Nigeria, Regional Benchmarking of Payment Cards, 2016 4

Table 3: Nigeria, Mode of Entry of Foreign Banks 20

Table 4: Nigeria, Debit Cards Comparison and Key Features, 2016 31

Table 5: Nigeria, Gold Credit Cards Comparison and Key Features, 2016 36

Table 6: Nigeria, Premium Credit Cards Comparison and Key Features, 2016 36

Table 7: Nigeria, Payment Instrument Transaction Values (NGN Trillion), 2012–2016 38

Table 8: Nigeria, Payment Instrument Transaction Values (US$ Billion), 2012–2016 38

Table 9: Nigeria, Payment Instrument Transaction Volumes (Million), 2012–2016 38

Table 10: Nigeria, Payment Cards in Circulation by Type (Million), 2012–2020 38

Table 11: Nigeria, Volume of Payment Card Transactions (Million), 2012–2020 39

Table 12: Nigeria, Value of Payment Card Transactions (NGN Billion), 2012–2020 39

Table 13: Nigeria, Value of Payment Card Transactions (US$ Million), 2012–2020 39

Table 14: Nigeria, Debit Cards in Circulation (Million), 2012–2020 39

Table 15: Nigeria, Debit Card Transaction Volumes, 2012–2020 40

Table 16: Nigeria, Debit Card Transaction Values (NGN), 2012–2020 40

Table 17: Nigeria, Debit Card Transaction Values (US$), 2012–2020 40

Table 18: Nigeria, Debit Cards in Circulation by Scheme (Million), 2012–2016 41

Table 19: Nigeria, Debit Card Transaction Values by Scheme (NGN Billion), 2012–2016 41

Table 20: Nigeria, Debit Card Transaction Values by Scheme (US$ Billion), 2012–2016 41

Table 21: Nigeria, Debit Card Transaction Values by Issuer (NGN Billion), 2012–2016 41

Table 22: Nigeria, Debit Card Transaction Values by Issuer (US$ Billion), 2012–2016 42

Table 23: Nigeria, Pay Later Cards in Circulation (Thousand), 2012–2020 42

Table 24: Nigeria, Pay Later Card Transaction Volumes, 2012–2020 42

Table 25: Nigeria, Pay Later Card Transaction Values (NGN), 2012–2020 43

Table 26: Nigeria, Pay Later Card Transaction Values (US$), 2012–2020 43

Table 27: Nigeria, Pay Later Cards in Circulation by Scheme (Thousand), 2012–2016 43

Table 28: Nigeria, Pay Later Card Transaction Values by Scheme (NGN Billion), 2012–2016 44

Table 29: Nigeria, Pay Later Card Transaction Values by Scheme (US$ Million), 2012–2016 44

Table 30: Nigeria, Pay Later Card Transaction Values by Issuer (NGN Million), 2012–2016 44

Table 31: Nigeria, Pay Later Card Transaction Values by Issuer (US$ Million), 2012–2016 44

Table 32: Definitions of Commonly Used Terms 45

Table 33: Common Features of Payment Cards 46

Figures

List of Figures

Figure 1: Nigeria, Payment Instrument Shares by Transaction Value (%), 2012 vs 2016 11

Figure 2: Nigeria, Payment Instrument Shares by Transaction Volume (%), 2012 vs 2016 12

Figure 3: Nigeria, E-Commerce Value 13

Figure 4: Nigeria, Population and Economic Indicators 21

Figure 5: Nigeria, ATMs, POS Terminals and Household Consumption 22

Figure 6: Nigeria, Payment Cards Transaction Value and Cards in Circulation, 2012-2021 24

Figure 7: Nigeria, Debit Card Penetration and Turnover Per Card 27

Figure 8: Nigeria, Debit Cards Scheme and Issuer Transaction Value Share, 2016 29

Figure 9: Nigeria, Pay Later Card Penetration and Turnover Per Card 32

Figure 10: Nigeria, Pay Later Cards Scheme and Issuer Transaction Value Share, 2016 34

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