Grace Ashiru
Bitmama has now joined the growing list of fintech companies pausing or suspending their card services. Back in September, Nigerian investment platform Rise announced the discontinuation of virtual card services on its platform, citing challenges like fluctuating exchange rates and issues with its service provider.
In a similar move, Bitmama informed its users via email that it had “decided to pause our partnership” with its MasterCard virtual card provider due to unforeseen issues. The email noted that the decision wasn’t easy but was ultimately made to prioritise the protection of its customers.
Earlier in June 2024, Carbon became the first fintech to publicly suspend card services this year. The company explained that the step was necessary to safeguard both itself and its users. Carbon’s Co-founder and CEO, Ngozi Dozie, remarked that introducing debit cards had been an unlucky venture for the company. According to him, most people already have debit cards, and many founders tend to make decisions with limited information.
In 2021, Carbon introduced debit cards, marking what it described as a significant milestone in its evolution from Nigeria’s largest digital lender to a microfinance bank licensed by the CBN. While some fintechs have cited challenges with card providers as their reason for discontinuing card services, Adedeji Olowe, CEO of Lendsqr, offered a different perspective. According to him, the primary reason for such a move is the high cost and limited revenue opportunities.
In 2022, Union54, a major virtual card provider for many fintechs, ceased operations due to a rise in chargeback fraud cases. This highlighted a broader range of issues affecting card services in Africa, including exchange rate fluctuations and fraudulent activities. For platforms like Chipper Cash, declined transactions caused by insufficient funds have been a significant concern. In response, the company announced a ₦500 non-refundable fee for such transactions.
For a company like Bitmama, its card service stands out as a key feature that distinguishes it from other crypto companies. As a startup promoting the use of cryptocurrency beyond just trading, Bitmama will likely need to explore innovative strategies to retain its customers.
