Carbon, the Nigerian digital bank known for its loans-led approach to banking, has partnered with Verve, the Interswitch-owned card scheme to resume issuing debit cards nine months after pausing card operations, the company told customers in a February blog post. The startup previously issued Visa cards but ended that partnership due to high costs and its “cumbersome” processes.
Carbon operates without an agent network or physical branches, limiting channels for cash withdrawals and online shopping. Discontinuing cards further limited its channels and the resumption of card issuance shows that despite the rise of contactless payments and bank transfers, debit cards remain one of the most effective channels for customers to access their funds.
“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,” Lotanna Anuforo, Carbon’s content manager, told TechCabal in November 2024.
Carbon did not immediately respond to a request for comments.
Nigerian fintechs once saw Mastercard and Visa cards as a must-have to acquire young Nigerians who loved to shop online. However, rising costs for maintaining these international card schemes—which charge dollar-based fees—and reduced international customer spending have changed that thinking.
Carbon began issuing debit cards in August 2021 after transitioning from a lender to a licensed microfinance bank to retain customers and drive transactions on its platform. Its cards also competed against bank-issued cards, which fintech customers often use as their primary account.
Besides dollar-based costs, fintechs without physical branches must partner with logistics companies to deliver cards, increasing issuing costs. They also face a $500+ fee charged by international card schemes for logging disputes on their resolution channels.
These factors have driven a shift toward Verve, which has issued over 70 million cards, cementing its dominance in the Nigerian market. Carbon’s switch to Verve, which charges in Naira, continues a trend of major Nigerian fintechs and banks opting for local card solutions. Moniepoint and OPay have issued over 17 million Verve cards, while most Nigerian banks issue Verve cards for customers.
Carbon’s shift in its debit card strategy highlights that despite the rise of bank transfers and the growing adoption of contactless payments, fintechs still need debit cards—for now—despite the costs and operational challenges.
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