Several leading African fintech firms have completely shutdown all virtual US dollar cards on their respective platforms, leaving users of such card stranded.
The list include Flutterwave, PayDay, Busha, Vella Finance, and Uganda-based Eversend.
Reasons
According to Flutterwave, the suspension is due to “an update from the company’s card partner” whose API Flutterwave uses to offer dollar cards to Africans.
It also appears that all the other fintechs use the same API.
APIs or Application Programming Interfaces allow you to integrate a service or an application onto your platform. For example, if you build a large tank that provides water to people using one tap, an API basically allows others to connect more taps to your tank and provide water to more people at different places.
It’s not clear which “card partner” Flutterwave and the other fintech startups are referring to, but these fintechs had issued virtual cards powered by MasterCard and Visa, the two leading global card issuers.
It is yet to be confirmed what exactly happened that led the said “card partner” to take this decision.
Dollar Card users stranded
Many African individuals and businesses use these dollar cards to pay for international services.
Paying for international services like Apple Music, YouTube Premium or even shopping online on Amazon is either impossible or limited with a local currency-based debit card from commercial banks.
More recently, commercial banks in Nigeria also reduced limits on international transactions using naira debit cards to $20 (around ₦10,000) per month. This means even for cards that work, they can only make about $20 worth of transactions per month.
In Zambia, only 10% of the adult population have access to debit cards.
Businesses aren’t left out as many use fintech-issued dollar cards to run their businesses.
Douglas Kendyson, CEO of Selar said, “It affects us in a big way because all our Facebook ads are connected to our Barter virtual card. Our Amazon web services (AWS) plan is also connected, and you can’t even afford to miss one payment, or else they’ll take you off.”
Not all fintechs are shutting down dollar card services though. It appears that Bitmama, Mono, and Chipper Cash are still up and running.
