Digital First Cards: Can Virtual Payments Solve Nigeria’s Card Cost Problem?

In Nigeria’s fast-evolving payments space, digital adoption is accelerating, and physical card usage is getting onboard as well. While global markets like Europe and China have embraced contactless and virtual payments, Nigeria is slowly catching up, largely due to infrastructure gaps and regulatory constraints.

Now, Sudo Africa has launched its Digital First Cards, a virtual card designed for contactless transactions as a cost-effective alternative to physical cards.

The Cost Burden of Traditional Card Issuance

For Nigerian fintechs and financial institutions, issuing physical cards is expensive forcinh many providers to operate at a near-loss, limiting card issuance to only the most commercially viable customers.

These high operational costs have also slowed the broader adoption of card-based payments, especially contactless, which remains rare despite its benefits in security and efficiency.

A Shift Towards Digital-First Issuance

To address this, startups like Sudo Africa have introduced Digital First Cards, enabling users to make contactless payments directly from their phones — eliminating the need for plastic. Beyond the consumer experience, these digital cards allow businesses to cut costs on production, distribution, and card replacement, potentially unlocking new revenue models.

From a technical standpoint, these cards use cloud storage, tokenization, and dynamic encryption to process transactions securely. Payments can be made via NFC-enabled tap-to-pay or QR codes, depending on device capabilities. This reduces both fraud risks and the need for card inventory management.

Regulatory and Infrastructure Challenges Remain

While Digital First Cards offer clear cost advantages, several structural challenges persist. Contactless payment infrastructure is still limited, with many merchants relying on older POS terminals that are not equipped for NFC or QR code transactions.

Regulatory compliance also remains complex. Providers offering digital cards must still navigate KYC requirements, data protection mandates, and CBN oversight, particularly if embedded financial services are offered alongside card issuance.

What’s Next for Nigeria’s Payment Ecosystem?

The growth of digital card issuance could mark a turning point for Nigeria’s payment sector — but it’s not without caveats. For businesses, the model offers a chance to scale payment offerings at lower cost. For consumers, it offers convenience and security, especially in an environment where financial fraud risks are rising.

However, mainstream adoption depends on more than technology. It will require merchant infrastructure upgrades, regulatory clarity, and continued consumer education to build trust in virtual payments.

Startups like Sudo Africa are betting that the next frontier in Nigeria’s digital economy will be cardless payments — and their success, or lack of it, will shape how fast the market gets there.