Nigerian fintech company Carbon has announced the termination of its debit card operations in Nigeria, just two years after its launch. The company’s co-founder and CEO, Ngozi Dozie, made this disclosure on Wednesday through a Substack post.
While Dozie did not provide specific reasons for discontinuing the card service, his post suggested that the decision to introduce debit cards might have been a strategic misstep. The current foreign exchange challenges, with operational costs denominated in dollars, likely influenced this decision.
“When I take a step back with the benefit of hindsight (and a card operation bill denominated in USD$), I question why practically all neobanks are pushing cards or even getting into it. Was this the right strategy for all of us, or was Carbon just unlucky?” Dozie wrote.
Dozie acknowledged that many founders make decisions based on limited information and insufficient analysis. He admitted that if he had thoroughly evaluated the industry, he might not have launched the card operations.
In hindsight, Dozie noted that Nigerians already have a plethora of debit cards. “If I had done the analysis and truly evaluated the opportunity, I don’t think I would have been so eager to push a strategy to provide consumers with their fifth debit card. The decision might have been the same, but with more respect for the potential risks,” he stated.
Dozie advised fintech startups considering launching debit cards to critically analyze the industry before proceeding.
Other fintechs like Kuda, Moniepoint, and OPay have rolled out debit cards for their customers. While Carbon partnered with Visa for its cards, OPay, Moniepoint, and Kuda have launched Verve cards, offering a local advantage, especially amid the current forex challenges.
When Carbon launched its debit cards in August 2021, it was described as a significant step in the company’s transition from Nigeria’s biggest digital lender to a microfinance bank licensed by the Central Bank of Nigeria.
“With the debit card, Carbon bank account holders will now be able to spend funds in their accounts via online and offline channels like ATMs and POS machines. More importantly, Carbon is prioritizing user experience, a trending issue among customers of financial institutions,” the company stated at the time.
Carbon had planned to build on its customer base of 3 million users by offering a more complete banking experience for people with different needs.
