Interswitch and its banking partners are stepping up efforts to promote tokenised card
payments, which could make transactions faster, more secure and convenient for Nigerians.
The initiative was highlighted at an Interswitch tokenisation documentary press briefing in Lagos at the weekend, where the company and participating banks discussed plans to expand contactless payments through compatible smartphones and other devices.
The Managing Director, Payment Processing and Switching, at Interswitch Purepay, Akeem Lawal, described tokenisation as a major development that could change how Nigerians pay for goods and services.
“Where we are going is just tapping,” Lawal said, explaining that the future of digital payments would involve customers completing transactions by tapping their devices rather than going through several steps.
Tokenisation replaces sensitive card details with a substitute identifier known as a token, helping to protect customers’ original card information during transactions.
With compatible devices and payment terminals, customers can make payments through digital wallets and authenticate transactions using security features such as fingerprints or facial recognition.
“You will have reduced the friction of transacting significantly,” Lawal said, noting that the technology could simplify payments and reduce the time customers spend completing transactions.
He said Nigeria’s payment system had evolved over the years through innovations such as interbank automated teller machine switching, point-of-sale services and online transactions, which have transformed how people access and transfer money.
According to him, tokenisation could build on these developments by making digital payments more seamless and convenient.
Under the conventional bank transfer process, customers typically open a banking application, enter an account number and follow several steps to complete a transaction. Tap-to-pay technology, however, allows customers to authenticate themselves and pay by tapping a compatible device on a payment terminal.
The Executive Director of Wema Bank, Tunde Mabawonku, highlighted the potential of mobile devices to make payments easier across different aspects of daily life, particularly public transportation 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, pointing to opportunities to extend contactless payments to transport services.
He said the technology could make mobile phones more versatile payment tools, allowing customers to use a single device for transactions across different services.
Beyond smartphones, the technology could also support smartwatches and other compatible wearable devices, giving consumers more options for contactless payments.
The Head of the Digital Banking Division at GTBank, Jimmy Banjoko, said Nigeria was still at an early stage of adopting tokenised payments but noted that changing consumer behaviour could encourage wider acceptance.
He pointed to the growing preference for digital and contactless transactions as evidence that consumers were becoming more receptive to alternative payment methods.
“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 expressed optimism that tap-to-pay transactions could become more common as customers gradually move from app-based transfers to contactless payment options.
However, wider adoption will depend on effective implementation, the availability of compatible devices and payment terminals, and consumers’ willingness to embrace the technology.
