Why Nigerians avoid ATM and credit cards

Credit Card Nigeria

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Posted by on Thursday March 28, 2013 at 8:55:4:

I know a couple of people who have never applied for nor use an ATM card and I also know some others who are business travellers but still don't prefer using bank issued credit cards. Why do they do so? I guess they have their reasons and I just want to talk about some of those reasons here.

In the first instance, most of the people I know that don't use ATM cards simply are not used to ATMs and don't know how they work. So, for the first group of people, they are mostly the older generation of Nigerians over 50 years and above and these include my parents. You don't expect such older people such as my dad or mum who are into trading and manufacturing business to start using ATM cards now. What they were used to were cash deposits and withdrawals using bank tellers or cheque books. That was common in the 80s and they are still sticking to it rather than be willing to learn new things like ATMs. Most old people stick to what they are used to while they were young and that works for them. Besides, they find it harder to learn about newer things unlike younger people.

The second group of people who I know don't prefer using ATM cards of have later dumped theirs are younger people who actually know how to use it but don't just trust ATM technology in Nigeria yet. They belong to a group of young people who have used ATMs and due to some of the bad experiences they have had, have resolved to stop using ATM cards. Some of the problems they've have with ATM cards are inter-bank charges, wrongful debits, ATM card seizures, monthly charges and other hidden charges. So, for the second group of Nigerians I personally know who have stopped using ATM cards, it is mostly about the inefficiencies of ATMs and their hidden charges that caused them to stop using it.

On the issue of credit cards cards, of course we should know that card technologies are mostly targeted at the younger people who understand how they work. However, when it comes to capturing that market, banks still have a lot of work to do as there are still a large number of Nigerians who don't know a thing about credit cards. One of the benefits of credit cards is that they allow people access to soft loans but for now, getting one is still tied to only people who are employed in a reputable company. Most Nigerians however don't have formal employment as they are mostly self employed and I think they should also have access to these facilities as long as they have good bank statements. There are more Nigerians in the informal sector than the formal one so the issue of credit cards, banks still need to open more grounds to capture a wider market. Besides there should be other forms of collateral for getting a credit card than just formal employment.

Another reason why most Nigerians don't apply for credit cards is that they don't understand how it works, repayment terms, interest rates and so on. More education on how it works would need to be done by means of advertising in the media.

In Summary, Nigerians avoid credit and ATM cards because of :

- Lack of trust
- Lack of understanding
- Bad experiences
- Hidden and wrongful charges

If you intend getting an ATM card or credit card from your bank, try to make a copy of the terms of service that would be given to you(with your application form) so that you really know what fees you have to pay. Any strange charges outside what is stated in the forms given to you would be considered a breach and you should protest to your bank if you have such an experience.


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