The news:
- Nigerian fintech startup, Carbon, has shut down its debit card service in Nigeria over two years after it launched.
- Ngozi Pascal Dozie, the co-founder and CEO of Carbon, disclosed the latest development in a Substack post published on Wednesday, June 19, 2024.
- Although the company didn’t reveal the reason for shutting down the debit card operation, Dozie’s post indicates that Carbon may have made the bandwagon decision to introduce cards.
“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?” part of Dozie’s article read.
In retrospect, Dozie realised that Nigerian customers already have many debit cards.
Noting that several startup founders make major business decisions with little information, Dozie stated that Carbon might not have dabbled into debit card issuing if he had properly analysed the strategy and deeply evaluated the opportunity.
“The decision might have been the same, but perhaps with more respect for the potential risks,” he explained.
Dozie also highlighted that Carbon launched its debit card business for all the wrong reasons.
Reiteration that discontinuing its card service was not a secret, Dozie noted that Carbon sent out emails to all its debit card holders to inform them that all card operations would stop on June 19, 2024.
“We weren’t hiding this fact and even followed up with a few reminders.”
In August 2021, when Carbon launched its debit cards, it described it as a “big step in the company’s transition from being Nigeria’s biggest digital lender to a microfinance bank licensed by the CBN.”
Following the launch of the debit card, Carbon bank account holders were expected to be able to spend funds in their accounts via online and offline channels like ATMs and PoS machines.
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The fintech added that it’ll leverage its newly introduced cards to build on its then customer base of 3 million users by offering a more complete banking experience. Moniepoint, Kuda, OPay, and other fintechs have rolled out debit cards for their customers. But compared to Carbon which launched its card service in partnership with Visa, an international card provider, these other neobanks are issuing Verve cards, giving them a local advantage, especially given the ongoing forex fluctuation.
