While cash remains king in Africa, the continent's growing digital population increasingly embraces new payment methods, including card payments. Total transaction value in the digital payments market will reach US$236.10bn in 2025.  

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Given the projected growth of digital payments, launching a card product can boost revenue and customer retention for your business, 

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But success depends on your target market, as preferences vary across African countries. Some are card-dominant, while others prefer mobile money or bank transfers.

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If you're building for a card-friendly market, this guide will walk you through everything you need to know about launching your card program. 

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Why launch a card program?

Customer loyalty and retention

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For digital banks, bill payment apps, and OFIs, cards are not just a way to make money. They can also help you build customer loyalty. Each time a user transacts with their card, your product is top-of-mind, fostering customer loyalty. 

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To compound this effect, some banks build gamification systems that award points for card usage. This incentivizes card usage, creates dependency on your product, and builds loyalty over time. 

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An example of this is Carbon, a digital bank in Nigeria that offers cashback and other perks every time you use your debit card.

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Brand awareness and recognition

Cards can be a marketing tool that helps build brand recognition as part of a business's go-to-market strategy. 

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An example of this was when Kuda launched their debit cards in Nigeria. It was quite the spectacle. The card packaging and design were intentionally created to get attention, and the strategy worked. Customers posted them on social media, helping Kuda drive awareness and customer acquisition.

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Over time, more brands replicated the same strategy to achieve the same results. 

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Pro tip: Factor context into every campaign. In addition to the well-designed cards, Kuda also didn’t charge for debit cards and delivered them for free to their customers at the time. 

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So, if you want to use cards as a marketing tool, find what works for your brand. 

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Additional revenue stream

It’s difficult to generate substantial revenue directly from issuing local currency-denominated debit cards, especially in Nigeria. 

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The CBN mandates that banks charge NGN1000($0.60) for issuance of naira debit cards in Nigeria. However, some banks charge as much as NGN5,000 ($3) or more by collecting fees for lifestyle memberships and other value-added services. 

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Also, you can generate more revenue by issuing foreign currency cards–the same opportunities in Kenya, Ghana, South Africa, and other African countries. 

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You can also generate revenue through transaction and card maintenance fees. Commissions and interchange fees are also good avenues to make money on your card programme. 

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Cash flow improvement

The second-order impact of introducing an additional revenue stream to your business is improved cash flow as your customers must fund their accounts before making payments using your card.

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Licenced digital banks and fintechs can generate deposits to increase cash flow or lend to other customers. 

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Customer insights

With cards, you gain more insights into your customers' spending patterns. You can use these insights to inform your product roadmap and build more products they love. 

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Key players in the card-issuing ecosystem

Issuer

An issuer could be a bank, fintech, or other financial institution that issues a branded payment card to the cardholder. Kora or a commercial bank like Access Bank and Zenith Bank are examples of issuers.

Acquirer

Acquirers are the financial intermediaries that make card transactions possible. They help businesses accept card payments, verify transactions, process the funds, and ensure merchants get paid for each card transaction.

The card network

These networks set the terms for card transactions and are the intermediaries between issuers, acquirers, and businesses. They keep all parties honest, determine interchange fees, and create security standards that keep electronic payments running smoothly and securely across the entire network. Examples include Mastercard, Visa, American Express, Diners Club, Verve, and AfriGo. 

Payment processors

They are the backend infrastructure that moves transactions and connects businesses/merchants to acquirers and payment networks. They also help businesses settle funds in different currencies. 

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Types of cards

Debit cards

This card type is linked to your bank account, which requires you to fund it before using it for transactions. It’s quite popular in many African countries. 

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Credit cards 

These cards provide borrowed funds you must repay with interest within an agreed timeframe. While popular globally, credit card adoption remains limited in most African countries. Mauritius, Namibia, Mozambique, and South Africa are the countries with the most credit card usage. 

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Prepaid cards

Unlike debit cards, prepaid cards aren't linked to any bank account. Users load a specific amount onto the card before use. While adoption is lower across Africa, these cards are helpful for budgeting, digital payments, and serving the unbanked population who can't access traditional banking services.

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Virtual cards

These are digital versions of debit, credit, or prepaid cards that exist without physical plastic. They're gaining popularity for online transactions, subscription services, and digital payments. 

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How to launch your card program 

1. Create a plan

Planning for your card program helps align all teams in your company toward a common goal. Your plan should identify the ideal customer profile (ICP) of the card product, the type of card you want to launch, differentiation strategy, marketing, risk and compliance management and other moving parts. 

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Conducting market research is an important part of creating a plan or strategy. For instance, launching a card product in markets like Ghana and Kenya might not make sense since mobile money dominates these regions. In contrast, Nigeria and South Africa are better markets for card products. Even within card-friendly markets, preferences vary significantly – credit card penetration in Nigeria is just 1.61%, compared to 10-20% in Mauritius, while debit card adoption is about 35% in Nigeria.

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Your strategy should also consider specific customer needs. For example, while building our virtual card program, we discovered that businesses wanted to issue cards to their customers and also needed corporate cards for their expenses. This insight led us to develop reserved cards, a corporate card solution for business spending. 

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You can also consider building an expansion strategy for your card product. Thinking about an expansion strategy will inform your launch strategy.

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In summary, create a plan that addresses all your card program's moving parts. 

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2. Choose your partners

When creating a card program, the common partners are an issuer processor, a settlement bank, a card manufacturer, a logistics company (if you’re building a physical card), and a credit provider (if you’re building a credit card program). Take time to select good partners for all the services you need.

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Issuer processor

These companies/banks work in the background to make card processing work. Think of them as the bridge between you and the card networks. They authorise transactions, manage cardholder data, help you manage settlements and prevent fraud. 

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You can become an issuer processor, but it can be expensive and require a solid partnership with banks that work directly with the card schemes. 

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Alternatively, you can work with partners who have already built a partnership to save money and get to market faster. 

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Promise Eleminhele, Head of Product Management at Kora, lists some questions to ask when selecting an issuer processor;

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Pricing and funds:

• What is the pricing structure?
• When a card is terminated, where do the funds in the card go?
• Is there an API to withdraw funds from cards?

Card management:

• Is there an API to suspend and terminate cards?
• Can the card scheme/brand be selected?

Security and risk:

• Do they have 3DS cards?
• What's their risk tolerance level?

Dispute handling:

• How are chargebacks and refunds handled?
• When a chargeback is refunded, is the fund returned to the customer's card?
• Are webhooks sent when a chargeback is accepted, declined and refunded?

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Settlement bank

Choosing the right settlement bank is important to building a successful card program. When selecting, prioritise banks with direct connections to the card networks. This will make your transactions faster and more cost-effective. Also, prioritise banks with a seamless API integration process and secure systems. 

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Logistics company

You need a great logistics company to distribute physical cards to customers. A great partner would assure the safety of your cards and charge you decent delivery fees. 

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Credit provider
If you’re building a credit card, you’ll also have to find a partner to provide credit. This could be a bank or fintechs like Oystr Finance and Lendsqr. You can also offer credit directly, but this might require you to build out a team, get a licence–depending on the country– and incur other operational costs. It all depends on the resources you have and your strategy. 

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Card manufacturers

They help you produce the plastic needed to issue cards and handle everything related to manufacturing, personalisation, and everything in between.  

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3. Figure out regulation, compliance and security

Card regulations can be quite complicated because they're subject to both local and international laws. Local regulations differ by country, but international regulations are standard. Card networks like Mastercard and Visa have regulatory requirements that every financial institution working with them must follow.

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For example, an issuer or merchant must handle chargebacks in specific ways regardless of where you are in the world.

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Your compliance team must stay current with these regulations to avoid being fined, falling victim to fraud, or having your partners pull the plug. 

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There are also important security requirements to consider. 

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You'll need to get Payment Card Industry Data Security Standard (PCI DSS) certification and set up anti-money laundering processes. PCI-DSS certifications can cost between $50,000 and $200,000, depending on the level and your transaction volume. 

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While ISO certifications aren't mandatory, they're important – they show card networks and partners that you take security seriously.

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Building proper anti-money laundering processes is important too, as well as solid KYC processes to verify customer data, perform real-time transaction monitoring and fraud detection, and report suspicious transactions and behaviours to regulators. Build a solid compliance and information security team to handle all these moving parts.

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5. Build your technology layer and user experience

The technology stack you build depends on whether you’re integrating directly with an issuing bank or a third-party partner, your roadmap, resources, and personal preferences. 

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Building a successful card program requires a robust technology stack. Here are some key components to consider:

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Card management system

Card management systems are the foundation of your program. They help handle essential card functions. If you’re working directly with a bank, build a robust card management system to handle card issuance, transaction processing, fraud detection, activation, pin management and customer service. Alternatively, you can onboard a provider to help with this and choose a provider that is scalable, secure, and able to integrate with your existing systems. 

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Data analytics
Integrate data analytics capabilities to gain insights into customer behaviour and spending patterns. These insights enable you to personalise customer experience and make data-driven decisions. Focus on metrics that matter to your business objectives. 

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Real-time control systems
Card operations can be challenging to manage, but real-time control systems help reduce the risk of fraud. 

Implement systems for transaction limits, geographic restrictions, merchant category blocking, and spend alerts. These controls help manage risk and provide a better user experience.

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Integration layer
You’ll need to integrate your card program with other products. So, it’s good to create APIs to help connect with core banking systems, payment networks and gateways, fraud monitoring services, and customer support platforms. These integrations enable seamless experiences across card creation, transaction authorisation, balance inquiries, and dispute management.

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User experience
Design intuitive interfaces for both mobile and web platforms. Key features should include virtual card management, real-time notifications, spend tracking, card controls, and support integration.

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Security infrastructure  

Protecting customers' financial information is important. So, build multiple security layers, including encryption, tokenisation, multi-factor authentication, and real-time fraud monitoring. Regular security audits and updates should also be part of your security routine to help minimise fraud.  

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Conclusion

Building a card-issuing programme is complex and nuanced and requires extensive financial and human resources. Consider using our issuing APIs to build a virtual USD debit card programme. If you want to build your own virtual or physical card program, the steps in this blog post will give you clarity and help you kickstart the process. 

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At Kora, our goal is to connect Africa to the world and connect the world to Africa via payments.

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