Mastercard is at the forefront of revolutionizing Nigeria's payment ecosystem by introducing contactless payment solutions. These solutions are designed to enable businesses to accept card payments easily and cost-effectively, utilizing technologies like "tap on phone," "QR Pay by link," and "Payment link" on their smartphones.
Recognizing the rapid expansion of the Nigerian payment market, the Central Bank of Nigeria (CBN) has taken proactive steps to shape the future of payments. In January 2021, the CBN introduced the Framework for Quick Response (QR) Code Payment, followed by the release of the Exposure Draft of the CBN Guidelines for Contactless Payment in Nigeria in October 2022.
The guidelines define contactless payment as “the consummation of financial transactions without physical contact between payer and the acquiring device(s),” enabling secure payments using Near Field Communication (NFC), Radio Frequency, or QR Codes. This technology offers several advantages to consumers, including convenience, speed, security, and accessibility.
Empowering SMEs Through Contactless Payments
With approximately 40 million small businesses in Nigeria, contactless payment options will make it easier for Small and Medium Enterprises (SMEs) to accept payments, thereby boosting growth. Traditional payment acceptance terminals can be too expensive for SMEs. Mastercard’s contactless options will dramatically reduce the cost of payment acceptance devices, making it financially feasible for SMEs to adopt this technology.
This means that even small businesses can use their low-cost smartphones to accept payments safely and easily, by utilising QR codes, Payment Links, and Contactless payments, all pre-equipped with Mastercard’s secure payment acceptance technology. For businesses, QR code payments represent a compelling way to process payments without having to invest in extra hardware - customers can simply set up QR code payments on their smartphone and they’re ready to go.
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Contactless payments also save a lot of time for business owners by decreasing transaction times and making it easier to invest that time in other business-related duties like inventory management. Transactions are processed swiftly, reducing waiting times, while providing a secure payment method that minimizes the risks associated with cash payments.
Mastercard contactless payments
Strategic Collaborations and Innovative Solutions
Mastercard has announced a strategic collaboration with Nomba, a leading payment solutions provider, to deliver seamless payment experiences for businesses across the country. Mastercard’s trusted global infrastructure and cutting-edge technology will help Nomba to elevate its payment solutions, enabling businesses to deliver faster, safer, and more reliable payment options.
By integrating Mastercard’s advanced capabilities, Nomba Checkout will support a variety of payment methods, including international cards, QR codes etc. The collaboration brings several benefits for businesses, including enhanced reliability through Mastercard’s secure global infrastructure, improved fraud prevention and data protection tools, and expanded access to Mastercard’s vast network of users.
Mastercard has also collaborated with Kalabash54, the fintech subsidiary of one of West Africa’s leading online travel tech company, Wakanow Group, to introduce innovative travel cards for customers in Nigeria and Ghana. The Kalabash54 travel card empowers travellers with a convenient all-in-one payment solution.
Benefits include the ability to fund trips directly from the Kalabash54 app using the physical or virtual card, available in local currency or USD. This collaboration aims to boost financial inclusivity by providing more secure, easy, and accessible payment solutions. With the travel industry Ghana and Nigeria on the rise, the demand for convenient payment methods is high.
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Financial Inclusion and Cross-Border Payments
As part of Mastercard’s financial inclusion strategy, the Mastercard Naija Card aims to provide affordable banking solutions to consumers who have historically been excluded from traditional financial services. Alternatively, the World Elite Credit Card, a premium credit card designed for ultra-high-net-worth individuals, offers a host of benefits and discounts, including travel, lifestyle, and health and insurance services.
Fidelity Bank Plc and Mastercard have collaborated to launch Fidelity Send, a new initiative to enhance cross-border payments and remittances in Nigeria. The new solution utilizes Mastercard Cross Border Services-a leading money transfer platform that allows participating banks to use the global Mastercard network to send money safely and securely to beneficiary bank accounts across the world.
Cross-border remittances continue to play an important role in Africa’s economy, with flows to Sub-Saharan Africa increasing. In recent years, Mastercard has amplified its efforts to facilitate better access to cross-border payments in Nigeria and across the continent, in line with its commitment to bringing one billion individuals into the digital economy.
Mastercard has introduced Mastercard Made in Nigeria 🇳🇬 for Nigeria-Essential Debit Card. The Domestic Card is aligned with national financial inclusion efforts by emphasizing domestic spending and offering more localized pricing, ensuring affordability for customers and supporting banks in reaching the low-to-middle-income segment, where cash remains dominant.
The Broader Economic Context
Nigeria is a young, diverse, and dynamic country that abounds with potential. A significant percentage of the more than 200 million people living in Nigeria are between the ages of 15 and 24, and 70 percent of the population is under the age of 30. However, youth unemployment poses a significant threat to Nigeria’s economic prospects.
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While the national unemployment rate is 33 percent, the youth unemployment rate is considerably higher, at over 42 percent. Three out of 10 Africans who enter the labour market annually are Nigerians. Over the next five years, we aim to expand access to affordable financial services for youth-led MSMEs in the agriculture, creative industry, and digital economy sectors.
Priority Collaboration with educational institutions is crucial to providing young people with skills in targeted sectors. We will prioritize the growth of the creative industry, addressing barriers and promoting job creation projects. Enhancing employability is also a priority and will be achieved through resume development, apprenticeships, mentorship programs, and digital literacy curriculum adoption.
Digital Payments and Market Trends
Digital payments in Nigeria have surged in recent years, driven by a rise in internet penetration and a thriving fintech sector. According to a report by Mastercard earlier this year, 99% of Nigerian small- and medium-sized enterprises (SMEs) accept digital payments.
As of 2023, Mastercard led Nigeria’s credit and debit card market, maintaining its position as the most widely used card brand. The dominance of Mastercard and Visa reflects the international orientation of the Nigerian card market. However, a considerable proportion of transaction value is still directed toward local card schemes, reflecting a diverse ecosystem of payment channels.
In 2023, account-to-account bank transfers emerged in Nigerian e-commerce as the leading payment method, constituting ** percent of online purchases. Debit cards followed closely, handling ** percent of transaction volume, while credit cards and cash on delivery each captured ** percent.
Despite a notable decline in market share since the COVID-19 pandemic, cash accounted for **** out of every 10 in-store transactions in 2024. While cash remains prominent, card payments (debit and prepaid, now grouped together) and mobile wallets are gaining traction - spurred by the popularity of fintech solutions like Paga and the ongoing expansion of POS infrastructure nationwide.
Here is a table summarizing the payment methods in Nigeria:
| Payment Method | Market Share | Trend |
|---|---|---|
| Cash | Dominant | Declining |
| Debit Cards | Significant | Increasing |
| Credit Cards | Moderate | Stable |
| Mobile Wallets | Growing | Increasing |
| Bank Transfers | Leading in E-commerce | Dominant |
Mastercard is also collaborating with the Nigerian Data Protection Commission (NDPC) to enhance data protection in the country. Under the collaboration, the Nigerian Data Protection Commission (NDPC) will onboard Mastercard’s employees nationwide onto its Virtual Privacy Academy, an education platform for data privacy courses.
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