MasterCards’ monopoly in national ID project broken

MasterCard International’s monopoly as payment processor in Nigeria’s national identity card project has been broken following a recent declaration by the leadership of the National Identity Management Commission (NIMC) that Verve, a local card operator, and Visa Incorporated will now participate in the rollout of smartcards, BusinessDay can now report.

MasterCard had been contracted by the commission to roll out 13 million smartcards with electronic payments capability for Nigerian citizens and legal residents before the end of the year under the National Identity Management System (NIMS) managed by the NIMC. This move by NIMC had drawn the indignation of industry stakeholders, who expressed concerns over MasterCard’s involvement in the national project at the expense of competent indigenous payment systems.

BusinessDay had reported that the concerns were further amplified by recent sanctions imposed on Russia by the United States (US) over the former’s position on the Ukrainian turmoil. The implication of MasterCard’s involvement in Nigeria’s identity project is that rules made by the US government institute which regulates or directs American firms (like Visa and MasterCard) would automatically impact Nigeria’s financial system.

“The e-ID card is about creating an assured identity on cards for payments. Our plan now is to roll out smartcards on three platforms, namely, MasterCard, VisaCard and Verve. The first two card processors have been approved and the last one is being tested,” said Chris Onyemenam, director-general, NIMC, at the ongoing Card Expo & Exhibition 2014 organised by Intermac Consulting in Lagos.

Speaking with BusinessDay on the sidelines of the expo, Onyemenam shed some light on some of the socio-economic benefits of the national identity management project. According to him, a reliable and secure national database could help alleviate the security concerns plaguing the nation.

“The scheme can help the law enforcement agencies in the country to do their jobs much more effectively through the provision of requisite infrastructure for verification and confirmation of identities of people coming in and out of the country,” he further explained.

Looking at the impact of the project on the economy, the NIMC boss said the scheme could assist in bringing more Nigerians into the formal financial system.

“Through the national identity scheme, you can deepen access to credit, strengthen the cashless drive, and in effect reduce the huge cost of managing the nation’s currency,” he said, adding that when the scheme is fully implemented, credit would drive the Nigerian economy as against cash.

“All over the world, credit drives the economy. We will move in that direction soon,” he said.

The national identity management project involves the creation of a national database, issuance of National Identity Number (NIN) and e-ID card. The personalised cards, according to Onyemenam, come with a unique chip design not found in debit cards, saying it was a deliberate security effort by the commission.