Emmanuel OchayiNigerian fintech company, Carbon, has decided to end its debit card operations in Nigeria, just two years after launching the service.
This decision was announced by Carbon’s co-founder and CEO, Ngozi Dozie, on Wednesday via a Substack post. The post indicated that introducing the debit cards might have been a strategic misstep.
Reasons Behind Carbon’s Shutdown
While Dozie did not specify the reasons for discontinuing the card service, he hinted that the company might have misjudged the market demand. Additionally, the ongoing forex challenges have increased the costs of operating the card service, which are denominated in US dollars.
Dozie wrote, “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?”
Founders’ Reflections
Dozie admitted that many fintech founders, including himself, sometimes make decisions without sufficient analysis. He acknowledged that if he had analysed the market more thoroughly, he might not have launched the card service. “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,” he reflected.
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He advised other fintech startups to critically assess the industry before launching similar products. “Maybe I had a scoop that if we launched a debit card, customers would trust Carbon more,” he mused. “Because, hey—just like those big banks you trust, I have the same bright, shiny card.”
Industry Context
Currently, several fintech companies in Nigeria, such as Kuda, Moniepoint, and OPay, offer debit cards to their customers.
Unlike Carbon, which partnered with international card provider, Visa, these companies are using Verve cards, providing them a local advantage amidst the forex challenges.
Initial Launch Goals
When Carbon launched its debit cards in August 2021, it aimed to transition from being Nigeria’s biggest digital lender to a microfinance bank licensed by the Central Bank of Nigeria (CBN). The debit cards were meant to enhance user experience and attract more customers.
At the time, the company stated, “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 prioritising user experience, a trending issue among customers of financial institutions.”
Emmanuel Ochayi is a journalist. He is a graduate of the University of Lagos, School of first choice and the nations pride. Emmanuel is keen on exploring writing angles in different areas, including Business, climate change, politics, Education, and others.
