Alternatives to Flutterwave’s Barter Virtual Card?

Two weeks ago, Flutterwave halted its virtual card service. Interestingly, Flutterwave wasn’t the only fintech company that did this: Busha, GetEquity, Payday, and Eversend also sent emails to their customers about the discontinued service. They attributed this action to a policy update from their card partner, Union54.

Union54, the first fintech company from Africa and a member of the Mastercard Principle, operates as an “issuing bank” and can issue debit cards (physical and virtual). With its card-issuing offering, the company is essential to the growth of the African fintech industry. However, Union54 began experiencing certain product-related operational challenges in May that led to a brief suspension of its Bank Identification Number (BIN), the first four to six numbers on a payment card that identify a card issuer. 

And apparently, there has been an increase in fraud-related incidents due to these operational issues. According to some industry analysts, this event demands more rigorous KYC/AML compliance checks in the card-issuing industry because inadequate due diligence for cardholder chargeback claims may contribute to more fraud.

Virtual dollar debit cards offered by fintechs have replaced local bank alternatives with transaction limits in recent years, proving to be a lifeline for many Africans. Customers (including individuals and businesses) can do worldwide online business using these virtual cards on websites like Alibaba, Google, Amazon, Netflix, and Spotify, using these virtual cards.

The suspension of virtual dollar card services implies that Nigerians will no longer be able to perform dollar transactions on the affected fintech platforms. This change would also make it even harder for Nigerians to use the service to make purchases outside the country to make dollar transactions.

Flutterwave advised its customers to find replacements for its virtual card services, and some of our recommendations are:

• Chipper Cash
• Bitmama
• Mono
• Sudo Africa
• Changera and 
• Gomoney virtual cards
• Domiciliary accounts from local banks.

Although we are unsure when Union54 would resolve these issues surrounding chargeback fraud and card issuing, it is essential to note that the suspension of these services is due to a ‘compliance audit’ at the fintech.