Neobank, Carbon, shuts down debit card operations in Nigeria 


Nigerian fintech company, Carbon, has shut down its debit card operations in Nigeria two years after its launch.


Carbon’s co-founder and CEO, Ngozi Dozie, disclosed this on Wednesday via a Substack post.


While he did not specifically state the reasons for discontinuing the card service, Dozie’s post suggests that the company might have made the wrong decision in introducing cards.


In addition, the current forex challenge might have also contributed to the shuttering of Carbon’s card business given that the costs of operating the card were in dollars.


“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.


Founders’ errors

While noting that many founders often make the mistake of running on little information without proper analysis, he said he would not have launched the card operations if he had properly analyzed the industry.


In hindsight, Dozie acknowledged that Nigerians already have many debit cards.


“If I had done the analysis…and truly evaluated the opportunity, I don’t think I would have been that gung-ho about pushing a strategy to provide consumers with their fifth debit card. The decision might have been the same, but perhaps with more respect for the potential risks.


“Maybe I had a scoop that if we launched a debit card, customers would trust Carbon more. Because, hey—just like those big banks you trust, I have the same bright, shiny card, marketed on billboards with happy-go-lucky youth with funky haircuts and bright clothing,” he wrote.


He advised fintech startups who are considering launching a debit card to critically analyse the industry before they dabble into it.


What you should know


Currently, fintechs such as Kuda, Moniepoint, and OPay, among others have rolled out debit cards for their customers. However, while Carbon’s card was launched in partnership with Visa, an international card provider, OPay, Moniepoint, and Kuda are rolling out Verve cards, which gives them a local advantage, especially with the current forex challenge.

When Carbon launched its debit cards in August 2021, it described it as the “big step in the company’s transition from being Nigeria’s biggest digital lender to a microfinance bank licensed by the CBN.”

“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 said at the time.

It added that with the introduction of cards, it planned to build on its customer base of 3 million users (as of then) by offering a more complete banking experience for people with different needs.


Credit: Samuel Akintaro


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