Interswitch and Nigerian Banks Push Tokenised Payments

In Short

Interswitch is encouraging wider adoption of payment tokenisation in Nigeria, alongside executives from Verve International, GTBank, Wema Bank and ProvidusUnity Bank.

Tokenisation replaces sensitive card data with a token, a substitute identifier, to reduce fraud risk and strengthen transaction security.

What Happened

Interswitch hosted an Interswitch Tokenisation Documentary Press Briefing where financial services executives argued that tokenisation can protect customers’ card details while making digital payments faster and more convenient.

The group described payment tokenisation as a method that replaces sensitive card information, such as a card’s primary account number, with a token. The token can be used for eligible transactions without exposing the underlying card details.

Akeem Lawal, Managing Director for Payments, Switching and Processing at Interswitch, said tokenisation reduces the risk of card details being compromised by making stolen tokens “useless to anyone else.” He said the token is linked to the actual card number but is not the same as the underlying card information, and that encryption links it to the user’s phone.

Lawal also described the shift as part of a broader progression in how payments work, from swiping and inserting cards to transfers and contactless payments, and said the next phase of consumer payments would move towards “just tap.”

Tunde Mabawonku, Executive Director, Retail and Digital Business at Wema Bank, said tokenisation is becoming more relevant as consumers move towards digital transactions. He said that as payments move online, “the next best thing is to tokenize your payment instruments.”

Why It Matters

Executives said tokenisation could limit fraudsters’ ability to exploit stolen or exposed card information as more Nigerians embrace digital transactions and smartphone-based payments.

They also pointed to everyday risks in conventional card payments, including when card numbers and expiry dates are visible, when someone observes a customer entering a PIN, or when card details are exposed during online transactions. Tokenisation aims to reduce what is exposed during those steps by showing only the token.