The Managing Director/Chief Executive Officer, CardCentre Nigeria Limited, Mr. Kehinde Lapite, speaks about opportunities and challenges in the card payment services segment of the financial market. Hamid Ayodeji presents the excerpts:
CardCentre Nigeria Limited (CCNL) is 15 years now. As one of the few local start-ups that have survived the harsh Nigeria business terrain, can you tell us how it all began?
It has been a bumpy ride I must say. Considering that most start-ups die before five years. What worked for us essentially is the uniqueness and bespoke solutions we provide, team spirit, belief, resilience, candour and of course God’s Grace. When we started out, we chose the mission – to be ‘’the dominant smart solutions provider in Africa.” That looked preposterous at the time but we set our minds to it. Without being immodest, I can say we have become a smart solutions provider of choice in Nigeria and we are set out to live our mission by taking the African market heads-on. We are not there yet but we will surely get there. Again, we have gotten this far because we have been delighting our customers with innovative products and solutions and by leveraging on our leading edge technology, friendly and passionate human capital amongst others. Driven by seasoned administrators made up of our esteemed Board of Directors and shareholders ably led by the visionary Founder and Chairman, Sir Demola Aladekomo, who’s enviable passion for the growth and success of the Nigerian nation is worthy of emulation, the journey to more positive impact has only just begun. The commitment and support of the Board of Directors has impacted positively on the Company. This is indeed fundamental to every successful start-up. That mentorship is key. It is significant to note that in the year 2007, the current President, then General Buhari, led the National Council of State of three Heads of States (General Gowon, General Babangida and Alhaji Shehu Shagari) and 29 Governors including Asiwaju Bola Tinubu, former Head of State, then a Governor: Late President Musa Yaradua, Mr Peter Obi, amongst others to our office in preparation for the INEC elections.
You spoke about innovation, can you shed more light on your core areas of operations?
CardCentre Nigeria Limited is a smart card personalisation and solution company. We specialise in the production and personalisation of card products such as PVC pre-printed cards, PVC based ATM/Debit and EMV/Chip cards for the financial sector, public /private sector and other related users of similar products. We offer turn-key solutions from card design and software development through to personalisation. Our services are also enhanced by strategic alliances with renowned world class card manufacturers and solution providers across Europe, Americas and Asia. The distinguishing edge for CCNL ahead of competition is the array of products and services we offer. Aside the card related products, we have handled onsite and offsite registration for notable institutions such as the Nigeria Society of Engineers, Nigerian Economic Summit Group, Airtel, and other notable names. Data Analytics is the key word here. Members and attendees are able to effect payment for services on the platform provided via a seamless gateway linked to all payment providers. We also develop robust membership portal, gift cards and other salient innovative products. In the past 15 years, we have managed to achieve the following milestones; pioneering the local manufacturing of scratch cards in Nigeria, pioneering the national identity card project in Nigeria, produced and personalised over ten million biometric verification number (BVN) cards, printed 70 million Nigeria INEC voters’ cards. In 2006, the then CBN Governor presented an award of excellence to CCNL as the best SME company in Nigeria. A very laudable one that led to many accolades thereafter. Others include; produced and personalised over three million residency cards for various states in Nigeria and produced/personalised millions of financial cards for banking and other financial sectors of the economy among others. In all of these, we partnered with multinationals and schools producing their identity cards. We earned a spot in the Guinness book of records for producing 1.75 million cards a day. We also purified the INEC database from 72 million to 53.4 million and produced all the 53.4 million cards in record of 90 days. We are very proud of the value we added to the economy of Nigeria and still counting.
In 15 years, how much can you say you have invested in Nigeria?
We have invested in excess N20 billion in the information and communications technology (ICT) sector in the past 15 years. We are still looking forward to investing more going forward.
You operate in a space where huge data are generated. These data can potentially be a target for criminals who might steal data for ulterior motives. How secured is the data you collate of Nigerians?
At CardCentre quality and security comes first; starting with the building and facilities, we have established world class security and safety policies and practices applicable across our facilities and processes. Our regular compliance with industry requirements and world standards has enjoyed the active support of our international partners, with the best of world leaders in card technology. With our installed production capacity of 150 million cards per annum both on the emv platform and other card types, a projected increase to 250 million cards per annum, we are confident of our ability to satisfy immediate and future needs for timely delivery of quality products next to none without compromising the integrity of the data we generate. In addition to this, there is a standard emv acceptable standard for data handling and retention that must be adhered to.
Can you share some of the industry challenges that you face, especially as a Nigerian company competing with international providers of similar solutions?
The competition in our industry is not very healthy. It is really hostile and paves way for unnecessary price cutting to the advantage of the customers and negative decline in revenue and profit of the service providers. It will interest you to note that some prices on offer for certain services have remained the same in the last 10years! If you check the cost of production/ sales within the period under review, you will agree with me that it is not sustainable. My advice to players is to come together and diligently address this, failing which could be a serious threat to the survival of the industry. The banks should also help the personalisation bureaus survive and avoid giving opportunities to saboteurs.
We compete favourably with the international providers. The expertise is here. This has been proven over time.
How is regulation like in your sector and what are the dominant concerns?
Like the banks and other financial institutions regulated by the CBN under very strict rules, we are bound by the dictates of Verve, Visa and Mastercard. So periodically, their certified auditors come down and inspect our facilities and audit same. Usually a very rigorous exercise that lasts a couple of days and of course attracts some heavy payments in millions. You do not want to fail any of their set parameters as the fines come heavy. The banks that we provide these services for also do periodic audit to be certain we are in conformity with approved standards.
There are concerns over duplication of data across platforms and sectors. Why can’t we have a platform where these data can be harmonised, and legitimate users can simply log on and mine the data rather than everyone collecting data at the same time?
We are front end partners to NIMC and NIBSS. I can say categorically that there has been some very top level harmonisation of data. The data generated by these two institutions happen to be perhaps the most that defines a being. Haven said that, we will witness in the long run a hub of very well purified data that will help the nation plan across all facets of life.
Do you do corporate social responsibility? If yes, what areas have you given back to society?
Speaking about this, we try to be silent and let our work speak for itself. The reward is immeasurable. I can tell you however that we have partnered with some hospitals, homes for the vulnerable and the needy in general.
We have indeed tried to pay back to the society by embarking on several CSR projects in service to humanity.
Can you tell us your projection for the company in the next five years?
We have what it takes and the potential of a country like Nigeria is yet to be tapped. We are all just jostling for a mere 25 per cent of the populace that are banked. Once we are able to move those numbers to a sizeable one, then to be honest, our plan is to go international and dominate Africa and indeed the world. We hope to become a minimum $1 billion company before the next five years.
How did you survive the recession and how are you fairing under the present economic situation?
We have faced very trying and turbulent periods. Ours is like the cat with nine lives, or perhaps the cat with 15 lives if I were to use the number of years we have stayed and survived the harsh terrain (laughs). There were periods we owed salaries for several months, lost very good quality hands, no thanks to some customers (government inclusive) that failed to uphold the dictates of contractual agreements. All of that is in the past now. Some of us remained resilient, believed and remained focused. We have put behind us the era of salary drought, cleared all backlogs, and witnessed the return and hiring of even better quality staff members among others.
Economy: Interestingly, the economy under this current dispensation has been largely stable and steadily on the increase positively. The foreign reserves have hit $44.69 billion as against $28.3 billion in 2015.Year on year inflation rates continued to improve from a high rate of 18.7 per cent in 2017, to 11.37 per cent in 2019. The country has since departed from recession. Our forex market remained relatively stable from 2017 with the convergence of the NIFEX and NAFEX windows witnessed by November 2018. This helps our industry so much as majority of our expenses are dollar denominated. As at Q4 2018, the economy grew by 2.18 per cent in real terms (year on year basis), that represents about 0.27 per cent or thereabout when compared to Q4 2017 and a rise of 0.55 per cent compared with the growth rate in Q3 2018. Overall GDP grew at an annual rate of 1.93 per cent in 2018 compared with 0.82 per cent in 2017 representing an overall increase of 1.11 per cent year on year. I can go on and on but the trajectory is on the upward rise.
Are there any government policies that impact your business positively or negatively?
To be candid, it has been a favourable one. The insistence and campaign for cashless and financial inclusions simply means more business our way. Though we have other competing factors, they are healthy ones. For example, there are so many payment options and that gives room for serious thinking and ideas.
What will you suggest the government do help you grow better?
Local content patronage. We have at least five vibrant players in our sector with the capabilities of matching world class standards. I see no reason why the National ID has not been solely contracted to Nigerian firms, after all the first card was designed and produced by us. Why can’t we also have them run on payment platforms that are indigenous? We have our own Naira.com. In fact, the name speaks for itself and clearly Nigerian like. What about verve?
Businesses complain about multiple taxation; does that happen in your sector as well?
The state government comes with figures that are sometimes more than the turnover of the firm (Laughs) how do I mean? Without exaggerating, asking a loss making firm (Good we are back to profit making) to pay taxes in itself is a position I believe should be looked into. Adding multiple disciplinary measures and excess default charges makes it a killer. The federal tax system is even a lot heavier. You also seat back trying to battle with these expenses that hardly appears properly utilised as most infrastructures are evidently decayed, you then see stuff like radio taxes/ levies without any known benefit there-in. It is appalling. Overall I thank our customers, shareholders, Board of Directors, management and staff members for the opportunity to serve and be of service.