Author update: An earlier version of this stated that Payday suspended its partnership with Mastercard. Further clarification has shown that it was not a partnership with Mastercard, but it was with an independent service provider that allows Payday, and other fintechs, to issue Mastercards.
Nigerian startup Payday has announced a temporary suspension of its partnership with its Mastercard provider for its virtual card service. In a statement released to customers, the company claimed its partnership with the global tech giant was not meeting its standards.
"We are committed to providing you with the best virtual cards experience; be it with Mastercard or VISA. To ensure this, we are partially pausing our partnership with our Mastercard provider, as their services haven't matched our promise to you."
With this decision, Payday is shifting its focus to its VISA card service. Users will temporarily be unable to create new Mastercard virtual cards as the company reexamines its partnership. However, the creation and usage of VISA cards remains unaffected and the company encouraged users to utilise this service for their virtual card needs.
The specifics of these service deficiencies have not been disclosed, but the implications are significant. This move fuels even more speculation about the complex dynamics between African financial services companies and global card infrastructure providers.
We reached out to Payday for further clarification on the nature of the service disruptions with the Mastercard provider, but there was no response as of press time.
Payday and recent activity in the virtual card space
Payday's decision to pause its Mastercard services arrives amidst recent challenges in the virtual card space, including chargebacks and insufficient funds. Other industry players have faced similar disruptions; for instance, Zambian startup Union54 was forced to shutter its virtual card services, pivoting instead to a super app model.
These disruptions have sparked discussions about the potential for local card schemes and alternative solutions in the fintech sector. Calls for a more resilient, locally-grounded system have intensified, hinting at possible future shifts within the fintech ecosystem.
Payday's recent update underscores these concerns, and the industry will be keenly watching the company's next steps as it strives to deliver on its promise of being the Neobank for the gig economy.
Don't miss out on Africa's financial revolution
Give it a try, you can unsubscribe anytime. Privacy Policy.
