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Nigeria's Futuristic National ID Cards Are Also Debit Cards

Nigeria's new biometric identitication cards double as debit cards which can be used at ATMs and stores.

The latest in financial innovation is coming from Nigeria—and it blessedly doesn't involve elaborate Internet scams. Nigeria's government, instead, is teaming up with MasterCard to run a pilot program which would turn the country's national ID cards into debit cards.

MasterCard and the Nigerian National Identity Management Commission made the government debit card announcement at the World Economic Forum on Africa on Wednesday. 13 million combination government ID cards/debit cards will be rolled out over the next year; Nigeria has a population of approximately 167 million. The ID cards, which contain demographic and biometric data belonging to each Nigerian citizen encoded on a microchip, will be linked to bank accounts. When the cards are used at stores or kiosks, cashiers will be able to verify the buyer's identity using both the regular photo identification and the biometric chip-encoded information.

For Nigeria, which is undergoing an economic boom fueled by new businesses and mobile phones, the worry is that ethnic violence and omnipresent corruption could slow down growth. Due to the tracking capabilities, security, and built-in paper trail of cashless currency, the Nigerian government feels debit card payments could be a solution. After the initial 13 million cards are given to pilot testers, the government hopes to deploy 120 million ID cards/debit cards once the scheme proves workable.

"The initial rollout in Nigeria of 13 million MasterCard-branded National Identity Smart Cards with electronic payment capability—followed by a nation-wide rollout of potentially 120 million cards to all adult citizens—will allow cardholders to deposit funds on the card, receive social benefits, pay for goods and services, withdraw cash from all ATMs that accept MasterCard, and engage in many other financial transactions that are facilitated by electronic payments," MasterCard's Michael Miebach told Fast Company via email. "In addition to the various functionalities of a Smart ID, the scheme will allow Nigerians, 70% of whom currently having no back account, to participate in the global economy."

Nigeria's Access Bank has signed on to initially issue the cards, with Unified Payments serving as the payment processor. Other banks have agreed to issue the ID cards/debit cards as well. Beyond making things easier for the government, they also have the potential to cause a banking boom in Nigeria by connecting the unbanked with bank accounts. Of note is the fact that, because the Nigerian cards use chip-and-pin technology, they are more sophisticated than American debit or credit cards.

While combination identification cards and debit cards might seem like a privacy advocate's nightmare, some experts feel they have amazing potential. David Wolman, author of The End of Money, told Fast Company that "The reality is that combating poverty means finding ways to get people access to basic financial services and that can't really happen without money in electronic form. It's not a panacea, obviously, and no one can predict if this particular program will succeed or flop. But that doesn't change the fact that services of this sort are desperately needed."
According to World Bank statistics, Nigeria has a massive 7.3% GDP growth rate—but 62.6% of the population lives below the poverty line.

Correction: An earlier version of this article misstated Nigeria's population.

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