Bitmama, a fintech company, has recently made the decision to pause its card services, joining the ranks of other companies facing challenges in this area. This move comes after Rise, another Nigerian investment platform, announced the discontinuation of its virtual card services due to issues with fluctuating exchange rates and service provider complications.
In an email sent to its users, Bitmama explained that it had decided to pause its partnership with its MasterCard virtual card provider due to unforeseen issues. The company emphasized that this decision was made to prioritize the protection of its customers, even though it was a difficult choice to make.
This trend of fintech companies suspending card services is not new. In June 2024, Carbon became the first to publicly suspend its card services, citing the need to safeguard both the company and its users. Ngozi Dozie, Carbon’s Co-founder and CEO, expressed that introducing debit cards had not been a successful venture for the company, as most people already have debit cards and decisions were made with limited information.
While some fintech companies blame challenges with card providers for discontinuing card services, Adedeji Olowe, CEO of Lendsqr, believes that the high cost and limited revenue opportunities are the primary reasons for such a move. Additionally, Union54, a major virtual card provider for many fintechs, ceased operations in 2022 due to a rise in chargeback fraud cases, shedding light on broader issues affecting card services in Africa.
For companies like Bitmama, their card services are a key feature that sets them apart from other crypto companies. As a startup promoting the use of cryptocurrency beyond trading, Bitmama will need to explore innovative strategies to retain its customers in the face of this pause in card services.
Overall, the decision to pause card services reflects the challenges and complexities faced by fintech companies in Africa. As the industry continues to evolve, companies like Bitmama will need to adapt and innovate to meet the changing needs of their customers.
