Nigeria’s Cards and Payments Industry: Emerging Opportunities, Trends, Size, Drivers, Strategies, Products and Competitive Landscape

The Nigerian card payments channel recorded strong growth during the review period both in terms of volume and value. The card payments channel grew at a review-period CAGR of 12.89%, rising from 30.5 million cards in circulation in 2009 to 49.5 million in 2013. Over the forecast period, the card payments channel is forecast to register a CAGR of 9.76%, rising from 56.1 million cards in circulation 2014 to 81.4 million in 2018.

The review-period growth was a result of the Nigerian government’s efforts to move its cash-based economy towards non-cash payments. Projects such as Cash-Less Lagos have been launched to promote electronic payments and curb issues such as tax evasion and money laundering.

In terms of transaction value, the card payments channel grew at a significant CAGR of 31.69% during the review period, from NGN1.1 trillion (US$7.1 billion) in 2009 to NGN3.2 trillion (US$20.3 billion) in 2013. The channel is expected to post a forecast-period CAGR of 11.09%, from NGN3.6 trillion (US$22.4 billion) in 2014 to NGN5.5 trillion (US$31.1 billion) in 2018.

Mobile payments (m-payments) registered an exponential review-period CAGR of 147.46%, from NGN1.3 billion (US$8.4 million) in 2009 to NGN47.1 billion (US$300.4 million) in 2013. M-payments are anticipated to record a forecast-period CAGR of 23.24%. E-commerce also grew at a healthy review-period CAGR of 24.29%, from NGN38.6 billion (US$259.2 million) in 2009 to NGN92.1 billion (US$586.9 million) in 2013, and is anticipated to record a forecast-period CAGR of 12.63%. Outbound travel spending by retail and corporate consumers increased during the review period at a CAGR of 17.25%, and is anticipated to increase further over the forecast period at a CAGR of 9.31%, fueling the growth of travel cards.

In 2012, the Central Bank of Nigeria (CBN) introduced a new policy stipulating a cash handling charge on daily cash withdrawals or deposits which exceed NGN500,000 (US$3,188.6) for individuals and NGN3,000,000 (US$19,131.5) for corporate bodies, in order to reduce the amount of physical cash in circulation. The policy is initially piloted in Lagos and will be gradually introduced in other Nigerian states. Consumers, financial institutions and the government are all expected to benefit from the policy.

Scope

• This report provides a comprehensive analysis of Nigeria's cards and payments industry.

• It provides current values for Nigeria's cards and payments industry for 2013, and forecast figures for 2018.

• It details the different economic, infrastructural and business drivers affecting Nigeria's cards and payments industry.

• It outlines the current regulatory framework in the industry.

• It details the marketing strategies used by various banks and other institutions.

• It profiles the major banks in Nigeria's cards and payments industry.

Key Highlights

• The Nigerian card payments channel recorded strong growth during the review period both in terms of volume and value. The card payments channel grew at a review-period CAGR of 12.89%, rising from 30.5 million cards in circulation in 2009 to 49.5 million in 2013. Over the forecast period, the card payments channel is forecast to register a CAGR of 9.76%, rising from 56.1 million cards in circulation 2014 to 81.4 million in 2018.

• In terms of transaction value, the card payments channel grew at a significant CAGR of 31.69% during the review period, from NGN1.1 trillion (US$7.1 billion) in 2009 to NGN3.2 trillion (US$20.3 billion) in 2013. The channel is expected to post a forecast-period CAGR of 11.09%, from NGN3.6 trillion (US$22.4 billion) in 2014 to NGN5.5 trillion (US$31.1 billion) in 2018.

• Mobile payments (m-payments) registered an exponential review-period CAGR of 147.46%, from NGN1.3 billion (US$8.4 million) in 2009 to NGN47.1 billion (US$300.4 million) in 2013. M-payments are anticipated to record a forecast-period CAGR of 23.24%. E-commerce also grew at a healthy review-period CAGR of 24.29%, from NGN38.6 billion (US$259.2 million) in 2009 to NGN92.1 billion (US$586.9 million) in 2013, and is anticipated to record a forecast-period CAGR of 12.63%. Outbound travel spending by retail and corporate consumers increased during the review period at a CAGR of 17.25%, and is anticipated to increase further over the forecast period at a CAGR of 9.31%, fueling the growth of travel cards.

• In 2012, the Central Bank of Nigeria (CBN) introduced a new policy stipulating a cash handling charge on daily cash withdrawals or deposits which exceed NGN500,000 (US$3,188.6) for individuals and NGN3,000,000 (US$19,131.5) for corporate bodies, in order to reduce the amount of physical cash in circulation. The policy is initially piloted in Lagos and will be gradually introduced in other Nigerian states. Consumers, financial institutions and the government are all expected to benefit from the policy.

Reasons to buy

• Make strategic business decisions using top-level historic and forecast market data related to Nigeria's cards and payments industry and each market within it.

• Understand the key market trends and growth opportunities within Nigeria's cards and payments industry.

• Assess the competitive dynamics in Nigeria's cards and payments industry.

• Gain insights in to the marketing strategies used for selling various card types in Nigeria.

• Gain insights into key regulations governing Nigeria's cards and payments industry.

Companies mentioned

Standard Chartered Bank Nigeria

United Bank of Africa

Zenith Bank

Guaranty Trust Bank

Access Bank

Ecobank

Keystone Bank

MasterCard

Visa

Interswitch

Table of Contents

1 Executive Summary

2 Analysis of Market Environment, Key Trends and Drivers

2.1 Payment Infrastructure and Emerging Technologies

2.1.1 Rising internet penetration

2.1.2 Rising mobile penetration and m-payments

2.1.3 Adoption of EMV infrastructure

2.1.4 Point of sale (POS) terminals

2.1.5 Automated teller machines (ATMs)

2.2 Business Drivers

2.2.1 Growth in retail industry

2.2.2 Growth in e-commerce

2.3 Economic Drivers

2.3.1 Sustainable GDP growth

2.3.2 GDP per capita

2.3.3 Inflation

2.3.4 Financial inclusion strategy

3 Cards and Payments Industry Share Analysis

3.1 Industry Overview

3.1.1 Credit transfers

3.1.2 Cash transactions

3.1.3 Check payments

3.1.4 Card transactions

4 Regulatory Framework and Card Fraud Statistics

4.1 Regulatory Framework

4.1.1 Oversight

4.1.2 Guidelines on prepaid card issuance and operations

4.1.3 Regulations on credit cards

4.1.4 Anti-money laundering measures

4.1.5 Foreign direct investment (FDI) regulations

4.2 Card Fraud Statistics

4.2.1 Counterfeit card

4.2.2 Card-not-present fraud

4.2.3 Lost or stolen card fraud

4.2.4 Card ID theft

5 Emerging Consumer Attitudes and Trends

5.1 Industry Segmentation and Targeting

5.1.1 Retail segment

5.1.2 Corporate segment

5.2 Travel and Tourism Spending

5.2.1 Outbound tourist trips

5.2.2 Outbound tourist spending

5.3 Retail Card Spending

5.3.1 Analysis by product categories

5.3.2 Analysis by retail channels

6 Analysis of Card Payments and Growth Prospects

6.1 Channel Share Analysis by Card Category

6.2 Size and Forecast of the Card Payments Channel

6.2.1 Analysis by number of cards in circulation

6.2.2 Analysis by transaction value

7 Analysis of Credit Card Payments and Growth Prospects

7.1 Overall Category Size and Forecast

7.1.1 Analysis by number of cards in circulation

7.1.2 Analysis by transaction value

7.1.3 Analysis by transaction volume

7.2 Transaction Share Analysis by Channel

7.2.1 Analysis by transaction value

7.2.2 Analysis by transaction volume

7.3 Personal Credit Cards Segment Size and Forecast

7.3.1 Analysis by number of cards in circulation

7.3.2 Analysis by transaction value

7.3.3 Analysis by transaction volume

7.4 Commercial Credit Cards Segment Size and Forecast

7.4.1 Analysis by number of cards in circulation

7.4.2 Analysis by transaction value

7.4.3 Analysis by transaction volume

7.5 Competitive Landscape

7.5.1 Scheme share analysis

7.5.2 Issuer share analysis

8 Analysis of Debit Card Payments and Growth Prospects

8.1 Overall Category Size and Forecast

8.1.1 Analysis by number of cards in circulation

8.1.2 Analysis by transaction value

8.1.3 Analysis by transaction volume

8.2 Transaction Share Analysis by Channel

8.2.1 Analysis by transaction value

8.2.2 Analysis by transaction volume

8.3 Competitive Landscape

8.3.1 Scheme share analysis

8.3.2 Issuer share analysis

9 Analysis of Prepaid Card Payments and Growth Prospects

9.1 Overall Category Size and Forecast

9.1.1 Analysis by number of cards in circulation

9.1.2 Analysis by transaction value

9.2 Open-Loop Prepaid Cards Segment Size and Forecast

9.2.1 Analysis by number of cards in circulation

9.2.2 Analysis by transaction value

9.3 Closed-Loop Prepaid Cards Segment Size and Forecast

9.3.1 Analysis by number of cards in circulation

9.3.2 Analysis by transaction value

10 Merchant Acquiring

11 Company Profiles of Card Issuers

11.1 Standard Chartered Bank Nigeria (SCBN)

11.1.1 Key financials

11.1.2 Card portfolio

11.1.3 Strategies

11.2 United Bank of Africa (UBA)

11.2.1 Key financials

11.2.2 Card portfolio

11.2.3 Strategies

11.3 Zenith Bank

11.3.1 Key financials

11.3.2 Card portfolio

11.3.3 Strategies

11.4 Guaranty Trust Bank (GTB)

11.4.1 Key financials

11.4.2 Card portfolio

11.4.3 Strategies

11.5 Access Bank

11.5.1 Key financials

11.5.2 Card portfolio

11.5.3 Strategies

12 Appendix

12.1 Methodology

12.2 Contact GlobalData

12.3 About GlobalData

12.4 GlobalData's Services

12.5 Definitions

12.6 Disclaimer

List of Tables

Table 1: Nigerian Payment Channels (NGN Trillion), 2009-2013

Table 2: Market Entry Strategies of Foreign Banks

Table 3: Nigerian Card Fraud (NGN Million), 2009-2013

Table 4: Cards Offered to Nigerian High-Income Individuals by Bank

Table 5: Card Offerings for Unbanked Nigerians by Bank

Table 6: Nigerian Travel Cards by Bank

Table 7: Nigerian Student Cards by Bank

Table 8: Cards Offered for Nigerian Business Customers by Bank

Table 9: Nigerian Card Spending by Retail Product Category (NGN Million), 2008-2012

Table 10: Nigerian Card Spending by Retail Channel (NGN Million), 2008-2012

Table 11: Nigerian Card Payments Channel by Card Category (Thousand), 2009-2018

Table 12: Nigerian Card Payments Channel Size by Volume of Cards (Million), 2009-2018

Table 13: Nigerian Card Payments Channel Size by Transaction Value (NGN Trillion), 2009-2018

Table 14: Nigerian Card Payments Channel Size by Transaction Value (US$ Billion), 2009-2018

Table 15: Nigerian Credit Cards Category Size by Volume of Cards (Thousand), 2009-2018

Table 16: Nigerian Credit Cards Category Size by Transaction Value (NGN Billion), 2009-2018

Table 17: Nigerian Credit Cards Category Size by Transaction Value (US$ Million), 2009-2018

Table 18: Nigerian Credit Cards Category Size by Transaction Volume (Million), 2009-2018

Table 19: Nigerian Personal Credit Cards Segment Size by Volume of Cards (Thousand), 2009-2018

Table 20: Nigerian Personal Credit Cards Segment Size by Transaction Value (NGN Billion), 2009-2018

Table 21: Nigerian Personal Credit Cards Segment Size by Transaction Value (US$ Million), 2009-2018

Table 22: Nigerian Personal Credit Cards Segment Size by Transaction Volume (Million), 2009-2018

Table 23: Nigerian Commercial Credit Cards Segment Size by Volume of Cards (Thousand), 2009-2018

Table 24: Nigerian Commercial Credit Cards Segment Size by Transaction Value (NGN Million), 2009-2018

Table 25: Nigerian Commercial Credit Cards Segment Size by Transaction Value (US$ Million), 2009-2018

Table 26: Nigerian Commercial Credit Cards Segment Size by Transaction Volume (Thousand), 2009-2018

Table 27: Nigerian Debit Cards Category Size by Volume of Cards (Million), 2009-2018

Table 28: Nigerian Debit Cards Category Size by Transaction Value (NGN Billion), 2009-2018

Table 29: Nigerian Debit Cards Category Size by Transaction Value (US$ Billion), 2009-2018

Table 30: Nigerian Debit Cards Category Size by Transaction Volume (Million), 2009-2018

Table 31: Nigerian Prepaid Cards Category Size by Volume of Cards (Million), 2009-2018

Table 32: Nigerian Prepaid Cards Category Size by Transaction Value (NGN Billion), 2009-2018

Table 33: Nigerian Prepaid Cards Category Size by Transaction Value (US$ Billion), 2009-2018

Table 34: Nigerian Open-Loop Prepaid Cards Segment Size by Volume of Cards (Million), 2009-2018

Table 35: Nigerian Open-Loop Prepaid Cards Segment Size by Transaction Value (NGN Billion), 2009-2018

Table 36: Nigerian Open-Loop Prepaid Cards Segment Size by Transaction Value (US$ Billion), 2009-2018

Table 37: Nigerian Closed-Loop Prepaid Cards Segment Size by Volume of Cards (Million), 2009-2018

Table 38: Nigerian Closed-Loop Prepaid Cards Segment Size by Transaction Value (NGN Billion), 2009-2018

Table 39: Nigerian Closed-Loop Prepaid Cards Segment Size by Transaction Value (US$ Million), 2009-2018

Table 40: SCBN – Key Financial Indicators (NGN Million), Year Ended December, 2011-2012

Table 41: SCBN – Card Portfolio and Key Features

Table 42: UBA – Key Financial Indicators (NGN Million), Year Ended December, 2012-2013

Table 43: UBA – Card Portfolio and Key Features

Table 44: Zenith Bank – Key Financial Indicators (NGN Million), Year Ended December, 2012-2013

Table 45: Zenith Bank – Card Portfolio and Key Features

Table 46: GTB – Key Financial Indicators (NGN Billion), Year Ended December, 2012-2013

Table 47: GTB – Card Portfolio and Key Features

Table 48: Access Bank – Key Financial Indicators (NGN Billion), Year Ended December, 2011-2012

Table 49: Access Bank – Card Portfolio and Key Features

Table 50: Key Definitions

List of Figures

Figure 1: Benchmarking the Nigerian Payment Cards Channel Against Other Regional Markets

Figure 2: Growth of Various Card Categories in Nigeria (%), 2009-2018

Figure 3: Nigerian Internet Users per 100 Inhabitants, 2009-2018

Figure 4: Nigerian M-Payments (NGN Million), 2009-2018

Figure 5: Nigerian EMV Card Volumes (Thousand), 2011-2013

Figure 6: Nigerian POS Volume and Penetration, 2009-2018

Figure 7: Nigerian ATM Volumes and Penetration, 2009-2018

Figure 8: Nigerian Value of Retail Sales (NGN Billion), 2009-2018

Figure 9: Nigerian Value of E-Commerce (NGN Billion), 2009-2018

Figure 10: Nigerian Real GDP Growth (%), 2009-2018

Figure 11: Nigerian Nominal GDP Per Capita (US$), 2009-2018

Figure 12: Nigerian Inflation (Consumer Price Inflation) Rate (%), 2009-2018

Figure 13: Nigerian Shares of Different Payment Channels (%), 2009 and 2013

Figure 14: Nigerian Card Fraud (%), 2009 and 2013

Figure 15: Nigerian Counterfeit Card Fraud Value (NGN Million), 2009-2013

Figure 16: Nigerian Card-Not-Present Fraud Value (NGN Million), 2009-2013

Figure 17: Nigerian Lost or Stolen Card Fraud Value (NGN Million), 2009-2013

Figure 18: Nigerian Card ID Theft Value (NGN Million), 2009-2013

Figure 19: Nigerian Cards and Payments Industry Segmentation by Card Type, 2014

Figure 20: Nigerian Volume of Outbound Trips (Thousand), 2009-2018

Figure 21: Nigerian Outbound Tourist Spending (NGN Billion), 2009-2018

Figure 22: Nigerian Retail Card Spending by Retail Product Category (%), 2012

Figure 23: Nigerian Retail Card Spending by Retail Channel (%), 2012

Figure 24: Nigerian Card Payments Channel by Card Category (%), 2009-2018

Figure 25: Nigerian Card Payments Channel Size by Volume of Cards (Million), 2009-2018

Figure 26: Nigerian Card Payments Channel Size by Transaction Value (NGN Trillion), 2009-2018

Figure 27: Nigerian Credit Cards Category Volume and Penetration (Thousand), 2009-2018

Figure 28: Nigerian Credit Cards Category Size by Volume of Cards (Thousand), 2009-2018

Figure 29: Nigerian Credit Cards Category Size by Transaction Value (NGN Billion), 2009-2018

Figure 30: Nigerian Credit Cards Category Size by Transaction Volume (Million), 2009-2018

Figure 31: Nigerian Credit Cards Category Transaction Value Share by Channel (NGN Billion), 2009-2018

Figure 32: Nigerian Credit Cards Transaction Volume Share by Channel (Thousand), 2009-2018

Figure 33: Nigerian Personal Credit Cards Segment Size by Volume of Cards (Thousand), 2009-2018

Figure 34: Nigerian Personal Credit Cards Segment Size by Transaction Value (NGN Billion), 2009-2018

Figure 35: Nigerian Personal Credit Cards Segment Size by Transaction Volume (Million), 2009-2018

Figure 36: Nigerian Commercial Credit Cards Segment Size by Volume of Cards (Thousand), 2009-2018

Figure 37: Nigerian Commercial Credit Cards Segment Size by Transaction Value (NGN Million), 2009-2018

Figure 38: Nigerian Commercial Credit Cards Segment Size by Transaction Volume (Thousand), 2009-2018

Figure 39: Nigerian Credit Cards Category Share by Scheme (%), 2013

Figure 40: Nigerian Credit Cards Category Share by Issuer (%), 2013

Figure 41: Nigerian Debit Cards Category Volume and Penetration, 2009-2018

Figure 42: Nigerian Debit Cards Category Size by Volume of Cards (Million), 2009-2018

Figure 43: Nigerian Debit Cards Category Size by Transaction Value (NGN Billion), 2009-2018

Figure 44: Nigerian Debit Cards Category Size by Transaction Volume (Million), 2009-2018

Figure 45: Nigerian Debit Cards Category Transaction Value Share by Channel (NGN Billion), 2009-2018

Figure 46: Nigerian Debit Cards Transaction Volume Share by Channel (Million), 2009-2018

Figure 47: Nigerian Debit Cards Category Share by Scheme (%), 2013

Figure 48: Nigerian Debit Cards Category Share by Issuer (%), 2013

Figure 49: Nigerian Prepaid Cards Category Volume and Penetration, 2009-2018

Figure 50: Nigerian Prepaid Cards Category Size by Volume of Cards (Million), 2009-2018

Figure 51: Nigerian Prepaid Cards Category Size by Transaction Value (NGN Billion), 2009-2018

Figure 52: Nigerian Open-Loop Prepaid Cards Segment Size by Volume of Cards (Million), 2009-2018

Figure 53: Nigerian Open-Loop Prepaid Cards Segment Size by Transaction Value (NGN Billion), 2009-2018

Figure 54: Nigerian Closed-Loop Prepaid Cards Segment Size by Volume of Cards (Million), 2009-2018

Figure 55: Nigerian Closed-Loop Prepaid Cards Segment Size by Transaction Value (NGN Billion), 2009-2018

Figure 56: Nigerian POS Terminals Market Shares (%), 2013

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