The recent decision by the Nigerian government to combine their new national identity card with a debit card has been raising a number of concerns ranging from privacy to conflict of interest. Cointelegraph reached out to MasterCard’s Daniel Monehin, Division President, Sub-Saharan Africa, with some questions about the program and MasterCard’s role.
- Daniel Monehin
If you have not kept up with the issue the new card is expected to combine a national identity card that citizens can use for identification, voting and in the future even travel, with a debit card that users can both receive government funds and make deposits as well as withdraw cash and make purchases. Some of the concerns already expressed are how much influence will this collaboration give the banking community over economic policy in Nigeria and how can government records be protected from a private company without sacrificing efficiency in the program.
We would like to thank Daniel Monehin for responding to our questions:
Cointelegraph: Please tell us about the new national identity card in Nigeria and MasterCard’s connection with the project?
Daniel Monehin: The National eID card program is an initiative led and implemented by the Federal Government of Nigeria under the mandate of the National Identity Management Commission (NIMC). NIMC is responsible for the creation, maintenance and operation of the National Identity Management System including the registration of citizens onto the National Identity Database, the issuance of National Identification Numbers, the issuance of the eID card to enrolled citizens, as well as the harmonization and integration of Government databases.
Early on in this program, the Federal Government of Nigeria recognized the importance of combining an identity card with payments functionality, acknowledging the transformative role that electronic payments and increased financial inclusion can play in creating inclusive growth in Nigeria.
A few years into the program, NIMC approached MasterCard to provide the payments technology on the eID card, as they recognized our deep experience with government prepaid cards, our proven track record in rolling out other large scale card schemes that combine biometric functionality with electronic payments, as well as our commitment to furthering financial inclusion and reducing the usage of cash in Nigeria.
In May 2013, NIMC signed an agreement with MasterCard to be the payments technology provider for the National eID pilot program. As part of the pilot program, NIMC will issue 13 million National eID cards with MasterCard’s prepaid technology to Nigerians 16 years and older.
MasterCard is responsible for providing the payments technology on the National eID card that enables cardholders to make safe and secure electronic payments. Using the National eID card as a payment tool, citizens can deposit funds, receive social benefits, save, pay for goods and services and withdraw cash at any of the millions of MasterCard acceptance locations globally or engage in many other financial transactions that are facilitated by electronic payments.
MasterCard’s prepaid technology is just one of the card’s 13 different applications, which is stored securely and separately from the other applets including the card’s identification applet. MasterCard is not involved in the identification component of the program and cannot access the National Identification Database or any citizen’s personal or biometric information.
CT: What percentage of the population is unbanked?
DM: Nearly 70% of Nigerian adults do not have bank accounts. Through the eID card, cardholders will gain access to formal financial services, and receive an identity card that is universally accepted, enabling them to live more self- determined lives.
CT: What are some of the reasons that so many people lack access to these services?
DM: One of the biggest barriers to owning a bank account is the lack of a universally accepted identification document. Combining an identity card with MasterCard’s prepaid payment capability creates a game changer as it breaks down this barrier - proof of identity - while simultaneously enabling Nigerians to access the global economy and providing citizens with state of the art financial services. Thanks to the scale and scope of the National eID program, financial inclusion is a goal that can be reached as it makes mainstream financial services available to those who cannot participate today.
CT: What are the effects of remittance and other fees on the average Nigerian?
DM: MasterCard does not set remittance fees. The Central Bank of Nigeria has issued guidelines for the maintenance of adequate and reasonable financial services to the public including regulation of the international remittance services to Nigeria.
CT: Citizens who have one of these cards will be able to deposit money to an account. What banks are being used to handle those accounts?
DM: The pilot issuing bank is Access Bank Plc. NIMC expects other banks to join the scheme in the next few months. These issuing banks will manage the cardholders’ financial accounts, should cardholders activate the payments functionality on their cards and use this service.
CT: What are some of the fees that MasterCard or the banks be charging Nigerians for transactions with this card?
DM: MasterCard does not set transactional fees. The issuing financial institutions that manage cardholders’ accounts set transactional fees.
It is worth noting the registration and first issuance of the identity card is free. However, there is a cost for any subsequent card replacement e.g. in the event of a loss, update, damage, expiration etc.
CT: The card can be used as a debit, voting and identity card. What about concerns for privacy?
DM: MasterCard is providing prepaid functionality on the National eID card as part of the pilot program. MasterCard does not grant open access to its transaction data to any law enforcement agency, neither in the US nor in other international jurisdictions. The privacy and security of transaction data is of paramount importance to MasterCard. As part of its transaction processing, MasterCard does not receive cardholder name and cardholder contact information. In the case of the Nigerian eID scheme, MasterCard does not capture or manage any personal data including biometrics. These remain the exclusive preserve of NIMC.
CT: What are the plans to improve digital infrastructure in rural areas to give everyone access and will fees be different for rural as opposed to urban residents?
DM: In 2012, there was approximately 22,000 Point of Sale (POS) terminals in Nigeria. Currently, there are about 150,000 devices, which have been deployed at merchants located in both urban and rural areas. Nigeria is on a steep curve when it comes to acceptance of POS technology, and is on a path to democratize acceptance by making it more functional and deployable. The deployment of Mobile Point of Sale (mPOS) devices will help to increase payment card acceptance in rural areas, as these terminals will reduce the cost to merchants and significantly boost acceptance of payment cards in rural areas.
The one note that we would like to make is that while MasterCard itself does not charge remittance fees the company greatly benefits from remittance fees charged by their clients. Monehin did however answer the question by stating that remittance fees will remain the same, regulated by the same guidelines that have burdened the West African people for generations.
Did you enjoy this article? You may also be interested in reading these ones:
- Op-Ed: Nigeria’s Identification Card Is a Move to Centralize the Nation's Financial Institutions
- Africa and Bitcoin: Remittance Revolution
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