MICROCAPITAL BRIEF: Initiative for Public Policy Analysis Calls for Regulation of Nigeria’s Payment Card Market

The Initiative for Public Policy Analysis, a Nigerian nonprofit public policy research institute, recently held an event to share its preliminary findings from research on the regulation of payment cards in Nigeria. A payment card is one that can be used to make a monetary payment, such as a debit or credit card. According to the authors of the study, Nigeria’s payment card market has been developing rapidly and needs to be regulated to minimize problems in the future. The authors propose implementing a regulatory authority to regulate things such as fees that merchants are allowed to charge card holders.

The presentation examines the evolution of payment cards in the country and finds that 90 percent of card use happens at automated teller machines (ATMs) rather than as retail transactions. Credit card use, although reportedly the most beneficial to users, remains less common. There is limited access to the payment card market in the country although there are plans to install another 40,000 point of sale (POS) terminals in retail establishments. To encourage the use of payment cards, the authors of the study suggest a campaign that addresses merchant and consumer fears such as fraud, settlement delay and ATM cash dispense errors. They also recommend reaching out to underbanked populations that have yet to use these services.

Finally, the study examines regulation of payment cards in the United States, Canada, Mexico and Australia to see how various issues are handled such as money laundering, insecure transactions, malfunctioning technology and consumer protection.

By Charlotte Newman, Research Associate

Sources and Additional Resources:

Information sent to MicroCapital from Initiative for Public Policy Analysis, “Stakeholder Workshop on Economic Regulation of Payment Cards in Nigeria.”

MicroCapital.org story, April 1, 2012, “MICROCAPITAL BRIEF: Central Bank of Nigeria to Endorse Microfinance Development Fund, More Automated Teller Machines (ATMs), Regulation Related to Electronic Statements, Dispute Resolution,” https://www.microcapital.org/microcapital-brief-central-bank-of-nigeria-to-endorse-microfinance-development-fund-more-automated-teller-machines-atms-regulation-related-to-electronic-statements-dispute-resolution/

MicroCapital.org story, January 22, 2012, “MICROCAPITAL BRIEF: To Promote Electronic Payments, Central Bank of Nigeria Taxing Cash Transactions,” https://www.microcapital.org/microcapital-brief-to-promote-electronic-payments-central-bank-of-nigeria-taxing-cash-transactions/

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