Last week, the Nigerian tech ecosystem was shaken following the news in regards to the suspension of virtual cards by some African fintech startups. These startups had outrightly suspended the use of virtual cards – these cards served as digital replicas of physical bank cards and were suspended following an update from the “card partner”.
Why is Union54 Down?
The “Card Partner” which has been identified as Union54 —a Y Combinator-backed startup in Zambia is suspending operations due to its upgrades and work streams. In a memo sent to its partners, Unio54 said that its card services will resume in the next six weeks.
However, Union54’s CEO, Perseus Mlambo said the pause to its services was as a result of a “necessary compliance audit”, which according to him, is key to maintaining the company’s stance as one of largest MasterCard issuer in the continent.
He also noted that the audit will take place within two weeks. Despite Union54 and Mlambo’s separate statements, TechCrunch reported that it is due to “chargeback fraud” that has been identified by Mastercard following complaints from various international merchants like Facebook, Google and AliExpress.
A chargeback fraud, also known as friendly fraud, occurs when a consumer makes an online shopping purchase with their own credit card, and then requests a chargeback from the issuing bank after receiving the purchased goods or services. This chargeback fraud case which was also noted by Benjamindada.com indicated a consistent increase in fraud cases emanating from the Bank Issuing Number (BIN) issued by Union54.
As part of Mastercard Principle membership and the first fintech company from Africa, Union54 acts as an “issuing bank” and can provide debit cards (physical and virtual). Union54 has more than 50 companies in its API sandbox; some of these companies were Flutterwave, PayDay, Plumter, and Bitmama, who have also suspended their dollar virtual cards.
We curated a list of alternative and available virtual dollar card providers in Nigeria below:
• Sudo Africa
Sudo Africa is a Nigerian fintech startup that was founded in 2020 as a card issuing API fintech. The company’s infrastructure allows either a developer or merchant to regulate and program the cards issued to suit their function.
The company was founded by Aminu Bakori and Kabir Shittu and also boasts of a timely disbursement of its card issuance.
The company in March this year, raised $3.7 million in a pre-seed fund for its card-issuing API platform, and has both spending and localized controls which differentiates it from Union54 and Barter by Flutterwave.
The company also charges interchange fees when its issued cards are used to make a web or POS transaction and takes authorization fees when spending and location-based controls are made. Sudo collects card production and personalization fees cheaper than incumbents.
• Chipper Cash
Chipper Cash is an African cross-border payments company. The company was founded in 2018 by Serunjogi and Maijid Moujaled to offer free cross-border payment service in Africa via a mobile app. The company currently operates in seven African countries — Ghana, Uganda, Nigeria, Tanzania, Rwanda, South Africa and Kenya.
The company, which raised the sum of $150 million in a Series C funding round, is currently valued as the seventh African unicorn alongside Interswitch, Flutterwave, Opay, Faery, Andel and Wave.
Also, the Chipper Cash card is a pre-funded and reloadable virtual visa card that can be used anywhere online for payment. The card works the same way as a local bank does online. The card can be used for online purchases anywhere Visa cards are accepted. It can also be used to book flights, subscribe to Netflix, or buy anything online easily from your Chipper cash wallet.
Chipper Cash has two types of wallets/accounts – tier 1 and tier 2. Tier 1 wallet has many limitations but tier 2 allows you to access more features of the app. Chipper Cash says it offers 5% cash back on all purchases.
Mono is a technology company on a mission to power the digital economy in Africa, using open banking as a layer for financial data, identity data, and bank transfer payments for businesses.
Founded in 2020 by Abdul Hassan, a former product manager at Paystack, and Prakhar Singh, the company’s technology enables businesses and individuals to gain access to financial information, such as account statements, stored at commercial banks.
Upon its start in 2020, the company is backed by leading investors and has raised $17.65 million in total funding till date.
Following its partnership with Flutterwave in 2021, Mono’s virtual card allows customers to verify their identity and authenticate account ownership before the payment can be authorized. This protects against fraud attempts and limits chargebacks.
Also, customer’s login details are doubly protected by both Mono’s AES 256-bit encryption and Flutterwave’s security protocols.
Bitmama was founded in 2017 by Ruth Iselema as a P2P digital currency exchange. The company grew into a platform where individuals can trade and manage cryptocurrencies, and digital assets conveniently.
Currently, it boasts as a trusted platform for cryptocurrency transactions as it is building a technology that will redefine the way persons do financial transactions through blockchain technology.
With the launch of its physical cryptocurrency card in 2022, the Bitmama crypto card works like any other credit card; the only difference is, instead of using funds from a bank account, an individual will fund the card from his/her crypto wallet on Bitmama.
The card can be used to pay for flight tickets, visa fees, Airbnb, Bolt rides, and literally all forms of online payments with the virtual crypto cards.
Furthermore, prior to the launch of the physical cryptocurrency card, Bitmama launched Changera – a flagship payment product. The Changera app is an international money transfer app that enables cross border transactions between 54 countries in Africa.
• ALAT Virtual Dollar Card
ALAT by Nigeria’s Wema bank is a digital-only brand operational within the space of a commercial banking system. The virtual card’s offering includes a dollar-denominated card used for payments online. The card is created on the ALAT app and is funded by dollars converted from the naira in a customer’s ALAT account at the current bank rate.
Upon card’s activation, one can load his/her card with funds up to $20,000 and also, convert dollars back to naira. The card can also be deleted after use.
Although it stands out as the only virtual card from a commercial bank, its restrictions are on money transfer websites and compatibility with 3D security.
• Wallets Africa
Wallets Africa is a Nigerian startup that offers virtual and physical naira and dollar cards to its customers. Due to its nature, its card services make it a preferable choice for travelers. Also, its digital wallets are 100% risk free and it has provided security for card holders.
Wallets Africa card services and servicing comes with a monthly $1 fee, a $0.75 fee on every foreign transaction, and a 2% fee to load it from an external account.
Fundall is a Nigerian digital bank that was founded by Kolapo Joseph. It provides wholesome financial products and services to individual Nigerians and businesses through a single platform.
Following the launch of its virtual cards in 2021, the company aims at eliminating the challenges of spending limits Nigerians come across when making international payments using naira cards.
With its card, users can spend internationally and transact on any website seamlessly as well as enjoy the convenience, flexibility, safety, and security of cashless payments across various channels – whether for shopping online on Shopify or Amazon, paying for streaming access on Netflix, or business services like Facebook Ads.
Fundall users will be able to get their first virtual dollar card for free, while the creation fee for subsequent card creation is just $2.
• Minty Bank
Mintyn online bank is a licensed digital product of finex microfinance bank. The bank’s virtual dollar card is an effective solution to a problem that has been plaguing different sectors of business, especially in e-commerce.
With Mintyn’s Virtual Dollar Card, a non-physical dollar-denominated card, customers can pay for international services like Amazon, Apple Music, Netflix, eBay, WordPress, and many more.
To enjoy the many benefits which Mintyn’s Virtual Dollar Card offers, all a customer needs to do is log into their account on the Mintyn app and activate a personal Virtual dollar card which takes less than a minute.