Interswitch and its banking partners are pushing tokenised card payments as a faster and more secure alternative to conventional bank transfers and physical cards. At a press briefing in Lagos, 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. Tokenisation replaces sensitive card details with a substitute identifier known as a token, reducing the exposure of original credentials during transactions.
Akeem Lawal, Managing Director for Payment Processing and Switching at Interswitch Purepay, described tokenisation as a potential turning point for digital payments. 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 complete transactions in fewer steps compared with conventional bank transfers, which typically require opening a banking application and entering account numbers.
The initiative builds on earlier changes in Nigeria's payments industry, including interbank automated teller machine switching, point-of-sale payments and online transactions. Tunde Mabawonku, Executive Director at Wema Bank, 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. The technology could also extend beyond smartphones to smartwatches and other compatible wearable devices, broadening the ways consumers can make contactless payments.
Jimmy Banjoko, Head of the Digital Banking Division at GTBank, 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.