Interswitch and its banking partners are pushing tokenised card payments as a faster and more secure alternative to conventional bank transfers and physical cards, seeking to reduce the steps customers take to pay for goods and services.
At an Interswitch tokenisation documentary press briefing in Lagos, weekend, the payment technology company and participating banks outlined plans to expand device-based payments, allowing customers to pay by tapping compatible phones and other devices at payment terminals.
The Managing Director for Payment Processing and Switching at Interswitch Purepay, Akeem Lawal, described tokenisation as a potential turning point for digital payments, predicting a shift in how Nigerians pay for goods and services.
“Where we are going is just tapping,” Lawal said, describing the next stage of payment adoption after the use of cards and bank transfers.
READ ALSO:Friesland Campina appoints Chioma Otisi-Igwe as Marketing Manager- Peak Milk
Tokenisation replaces sensitive card details with a substitute identifier, known as a token, reducing the exposure of original credentials during transactions. When supported by compatible devices and payment terminals, the technology allows customers to make payments using digital wallets and authenticate transactions through methods such as fingerprints or facial recognition.
“You will have reduced the friction of transacting significantly,” Lawal said, adding that customers could authenticate payments through biometric methods and complete transactions in fewer steps.
The initiative builds on earlier changes in Nigeria’s payments industry, including interbank automated teller machine switching, point-of-sale payments and online transactions. Lawal said these innovations had changed how consumers accessed and moved money, adding that tokenisation could represent another major development.
Under the conventional transfer process, customers typically open a banking application, enter an account number and complete the transaction through several steps. Tokenised payments can shorten that process by allowing users to authenticate themselves and tap a compatible device at a payment terminal.
The Executive Director at Wema Bank, Tunde Mabawonku, highlighted the growing role of mobile devices in everyday payments, arguing that customers should be able to use their phones across different settings, including public transport and international travel.
“This same phone, I should look to tap to make payments on the BRT bus. I should look to tap to make payments on the blue line, the red line,” Mabawonku said, referring to opportunities to extend contactless payments to transport services.
The technology could also extend beyond smartphones to smartwatches and other compatible wearable devices, broadening the ways consumers can make contactless payments.
The Head of the Digital Banking Division at GTBank, Jimmy Banjoko, described the Nigerian market as being at an early stage of adoption. He linked the opportunity to changing consumer behaviour, including the growing preference for digital and contactless transactions.
“We see that is a signal to suggest that innovation can go in this line because market behaviour is already tending towards this contactless,” Banjoko said.
He expects the technology to gain traction as customers move from app-based transfers towards tap-to-pay transactions, although wider adoption will depend on implementation and consumer acceptance.
Discover more from The Industry
Subscribe to get the latest posts sent to your email.
