With Nigerian banks resuming international transactions on naira debit cards, concerns have emerged over the future of fintech companies offering virtual dollar cards — platforms that became indispensable during a period when traditional banks suspended such services.
However, key players in the fintech space insist the development will not disrupt their operations or diminish their value.
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Between mid-2022 and early 2023, major banks including Standard Chartered, First Bank, GTBank, and Zenith halted international payments on naira cards, citing forex constraints. This vacuum led to a surge in popularity for fintech solutions like BoldSwitch, Cardtonic, Chipper Cash, GoMoney, Geegpay, and others, which enabled Nigerians to make dollar-based payments for services like Netflix, Spotify, and Amazon.
Now that banks have lifted those restrictions, many assumed that fintechs would lose ground. But fintech operators say their platforms still offer advantages that traditional banking channels lack.
Their confidence stems from traditional banks’ lower transaction limits. For example, Wema Bank and First Bank offer $1,500 quarterly, GTBank restricts users to $1,000 quarterly, and UBA has a daily and monthly limit of $1,000, depending on the card used.
However, Chipper Cash and Eversend have a monthly spend limit of $10,000, Geegpay restrict users to $5000 monthly, and Ufitpay has a $2,000 monthly limit, while Fundall has no limit. Also, BoldSwitch and Sendbit have a $10,000 maximum transaction limit.
BoldSwitch, a fast-rising fintech startup, told TheCable that its value proposition remains solid, even with the return of bank-issued naira cards for global use.
“Our value proposition remains intact because many users still seek alternative platforms that provide higher transaction limits, faster access, and more flexible onboarding than traditional banks,” the company said.
BoldSwitch also highlighted persistent issues with bank cards, such as low monthly limits, high rejection rates on global platforms, and volatility in exchange rates. In contrast, the startup says it offers “stability, transparency, and access to international payments without the usual friction.”
To stay competitive, BoldSwitch says it is investing in features powered by artificial intelligence and building business-facing tools, including solutions for creators and in-store payments, that are largely unavailable through commercial banks.
Similarly, Cardtonic, a digital exchange platform, welcomed the resumption of international transactions on naira cards, calling it a positive move that expands access for Nigerians.
However, the company is still monitoring the situation to assess its long-term impact.
“People should not be restricted from making international payments just because they are Nigerians,” Cardtonic said.
Experts also suggest that the impact of the policy shift may not be as dramatic as anticipated.
Ayokunle Olubunmi, head of financial institutions ratings at Agusto & Co., argued that the fintechs’ customer base remains relatively modest and may not face significant erosion. He noted that even with the resumption, bank cards still come with transaction limits that users may find restrictive.
“Some of the fintechs might see a decline in their transactions, but people might still prefer to use them,” Olubunmi said.
He added that fintechs are often agile enough to pivot or explore partnerships with banks rather than compete head-on.
FURTHER READING
For now, the fintechs remain confident. While the banks may have re-entered the playing field, the fintechs believe the game has changed and there’s still room for everyone.
Philip Ibitoye is a Special Correspondent with EKO HOT BLOG. Click here to find daily analysis and critical insight on trending issues in Lagos and other parts of Nigeria.
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