Touch and Pay Technology Boosts Prepaid Card Usage in Nigeria

According to a survey by international market research firm Euromonitor International, the use of closed loop prepaid cards increased by 291% between 2021 and 2024 due to Touch and Pay (TAP) Technologies Limited, the fintech business that created the Cowry card for Lagos’ rail and Bus Rapid Transit (BRT) systems.

Although they come preloaded with money, closed-loop systems prepaid cards are only usable within a certain network.

TAP is the main payment provider for Lagos State’s transit system, its largest market, though particular information for Lagos was not disclosed. This growth demonstrates the growing adoption of cashless payments, especially in Nigeria’s largely informal transportation sector, where they reduce the time and hassle associated with cash transactions as well as the risk of theft and robbery, which are common issues in the sector. In Nigeria, the number of closed-loop prepaid card transactions increased from 2.2 million in 2021 to 8.6 million in 2024, with transaction value increasing from ₦6.16 billion to ₦18.03 billion during the same period.

“Developments in road infrastructure and the introduction of the Lagos Blue Line train are linked to the rise of prepaid cards, which has driven demand for Cowry cards since their introduction in 2021,” the Euromonitor research stated.

Over five million people have used TAP’s Cowry card since its 2020 introduction, up from 3.8 million in 2023. Compared to the 400,000 cards issued in 2023, 552,000 cards were issued in 2024, CEO Olamide Afolabi stated. The business asserts that last year it handled transactions totalling more over ₦20 billion.

Cowry cards are contactless debit and credit cards that employ NFC (near-field communication) technology to pay for bus and rail rides. They cost ₦1,000. The Cowry Wallet app allows users to add money and has a pay-with-phone option, although most commuters would rather top up through agents or bank transfers.

It emphasizes how important user adoption is to Nigeria’s payment ecosystem, a market that merits careful consideration. A smooth digital payment system is essential to a flourishing retail industry.

Although there are still obstacles to overcome, more people in Nigeria are realizing the advantages of a cashless transit system. The industry will continue to include digital payments as acceptance grows, enabling millions of people to travel easily and without using cash.