Nigeria’s digital payment industry is moving towards a more convenient way to pay as Interswitch expands its efforts to make contactless payments more accessible to consumers and businesses.
The payment technology company is working with banks, card schemes and merchants to support the adoption of tokenised payments, a technology that allows customers to make transactions without repeatedly exposing their actual card details. The development is part of a wider push to make tap-to-pay transactions a more familiar payment option in Nigeria.
Interswitch announced on October 19 that it was helping financial institutions establish the infrastructure needed to support tokenised payments. On October 26, the company also announced a partnership with five Nigerian banks: GTBank, Wema Bank, Providus Bank, Zenith Bank and FirstBank. Tap-to-pay allows customers to complete eligible transactions by bringing a compatible contactless card or device close to a payment terminal.
Behind the convenience is payment tokenisation. Rather than exposing the customer’s original card number during every transaction, the system uses a substitute digital identifier known as a token. This helps reduce the exposure of sensitive payment information and can make certain forms of payment fraud more difficult. The technology can also support digital wallets and, where available, payments through compatible smartphones and wearable devices. Merchants could also benefit from quicker transactions and additional payment options for customers.
However, successful adoption will depend on more than the technology itself. Banks must support the service, merchants need compatible payment terminals, and consumers must have access to eligible cards or devices.
Interswitch’s latest move highlights the growing competition among payment providers to improve how Nigerians make digital transactions.
As the country becomes increasingly dependent on electronic payments, the next challenge will be turning these new payment capabilities into services that ordinary consumers can easily access.