Nigerian digital lender Carbon has shut down its debit card operations just two years after launch.
CEO Ngozi Dozie revealed this decision in a recent Substack post, attributing it to market saturation and the ongoing foreign exchange challenges in Nigeria.
In his post, Dozie noted that Nigerians already have access to numerous debit cards from traditional banks, which diminishes the need for another entrant in the market.
“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,” Dozie wrote.
Dozie also noted the operational costs tied to the dollar-denominated card service as a burden. Reflecting on the decision, he acknowledged that some founders, including himself, sometimes make strategic moves without thorough industry analysis. “The decision might have been the same, but perhaps with more respect for the potential risks,” he admitted.
Dozie shared that the move to introduce debit cards was partially driven by a desire to boost customer trust and attract venture capital. However, he now questions the necessity of such a strategy.
“Maybe I had a scoop that if we launched a debit card, customers would trust Carbon more. Because, hey—just like those big banks you trust, I have the same bright, shiny card,” he said.
Dozie pointed to the need for a more analytical and thoughtful approach to business decisions in the fintech industry. He urged other fintech startups considering launching debit cards to thoroughly analyze the market and operational dynamics before proceeding. “Take it as my scoop to you,” he advised.
Despite the challenges, Dozie is positive about the future of Carbon and the fintech sector in Nigeria. He called for a change in how failures and strategic pivots are perceived, asserting that they should be seen as opportunities for learning and growth rather than signs of decline.
This development comes at a time when other Nigerian fintech companies like Kuda, Moniepoint, and OPay are rolling out debit card services. Notably, these competitors are utilizing Verve cards, a locally issued option that may offer advantages in the current forex climate.
While Carbon positioned its debit card launch in 2021 as a major step towards becoming a full-fledged microfinance bank, the recent decision changes its focus.
