Interswitch and its banking partners are promoting tokenised card payments as a faster and potentially more secure way for Nigerians to pay for goods and services, with plans to expand contactless transactions using compatible smartphones and other devices.

At a tokenisation documentary press briefing in Lagos over the weekend, executives from the payment technology company and participating banks outlined how tap-to-pay technology could simplify transactions and reduce reliance on conventional bank transfers and physical payment cards.

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The Managing Director of Payment Processing and Switching at Interswitch Purepay, Akeem Lawal, described tokenisation as a potential turning point for digital payments, predicting that customers would increasingly complete transactions by tapping their devices at compatible payment terminals.

“Where we are going is just tapping,” Lawal said, describing the next phase of payment adoption.

Tokenisation replaces sensitive payment card information with a substitute identifier, known as a token, which helps prevent the original card details from being exposed during transactions.

When supported by compatible devices and terminals, the technology allows customers to make payments through digital wallets and authenticate transactions using methods such as fingerprints or facial recognition.

“You will have reduced the friction of transacting significantly,” Lawal said, explaining that biometric authentication could help customers complete payments in fewer steps.

The initiative builds on previous developments in Nigeria’s payments industry, including automated teller machine switching, point-of-sale terminals and online banking transactions.

Lawal said these innovations had transformed how Nigerians accessed and transferred money, adding that tokenisation could usher in another phase of digital payment adoption.

Under the conventional bank transfer process, customers typically open a banking application, enter the recipient’s account details and authorise the transaction.

Tap-to-pay technology can simplify the experience by allowing users to authenticate themselves and tap a compatible device at a payment terminal.

Wema Bank’s Executive Director, Tunde Mabawonku, highlighted the potential to extend contactless payments beyond retail outlets to public transportation and international travel.

“This same phone, I should look to tap to make payments on the BRT bus. I should look to tap to make payments on the blue line, the red line,” Mabawonku said, referring to the possibility of using mobile devices for payments on Lagos transport services.

The technology could also support compatible smartwatches and other wearable devices, offering consumers more ways to make contactless payments without using a physical card.

GTBank’s Head of Digital Banking, Jimmy Banjoko, said Nigeria was still at an early stage of adoption but pointed to changing consumer behaviour as an opportunity for further innovation.

“We see that is a signal to suggest that innovation can go in this line because market behaviour is already tending towards this contactless,” Banjoko said.

He expressed confidence that tap-to-pay transactions could gain traction as consumers become more comfortable with contactless technology and alternatives to app-based transfers.

However, broader adoption will depend on factors including the availability of compatible devices and payment terminals, support from financial institutions, transaction costs and public confidence in the technology.

While tokenisation can reduce the exposure of original card credentials, it does not eliminate every payment risk. Consumer education, secure authentication and effective fraud monitoring will remain important as contactless payment options expand.

For Interswitch and its banking partners, the goal is to make digital payments more convenient while strengthening the protection of sensitive payment information.