The initiative was discussed at the Interswitch Tokenisation Documentary Press Briefing in Lagos, where executives from Interswitch, Verve International, GTBank, Wema Bank and ProvidusUnity Bank highlighted the potential of tokenisation to reduce exposure of payment information and support the growth of contactless transactions.

Payment tokenisation replaces sensitive card details, such as a card number, with a substitute digital identifier known as a token. Instead of sharing the original card details in every transaction, the payment system uses the token within an authorised environment. This can limit the usefulness of stolen payment information, although the level of protection depends on how the technology is implemented.

Akeem Lawal, Managing Director of Payments, Switching and Processing at Interswitch, described tokenisation as an important development in payment security. He said the technology could help reduce the risks associated with compromised card details while supporting new ways for customers to pay.

Lawal said tokenisation builds on earlier changes in Nigeria’s payment industry, including chip-and-PIN cards, automated teller machine networks, point-of-sale services and online payments. He said the next stage could see more consumers paying by tapping compatible smartphones and other devices at supported terminals.

Tunde Mabawonku, Executive Director of Retail and Digital Business at Wema Bank, said the growing reliance on smartphones was creating opportunities for mobile-based payments across everyday activities, including shopping and transportation.

He argued that payment methods needed to reflect changing consumer habits, particularly among younger people who increasingly depend on their phones for communication and digital services.

At GTBank, Divisional Head of Digital Banking and Financial Inclusion Jimmy Banjoko said demand for contactless payments had gained attention following the COVID-19 pandemic. He said tokenisation could make payments easier by reducing the number of steps customers take to complete transactions.

Banjoko expressed optimism that contactless payments could become more widely used as consumers and merchants become familiar with the technology. However, broader adoption will depend on the availability of compatible devices, participating banks, supporting payment terminals and merchant acceptance.

Vincent Ogbunude, Chief Executive Officer of Verve International, said tokenised payments could simplify checkout while supporting additional security measures. He explained that compatible devices may allow customers to authenticate transactions using methods such as fingerprint recognition, depending on the device and payment setup.

Ogbunude said conventional bank transfers can involve several stages, while some tokenised transactions may be completed in fewer steps. He also disclosed that Verve was working with technology companies, including Apple and Google, to advance its contactless payment offerings.

The initiative forms part of a wider effort to expand tap-to-pay services through digital wallets and participating banks’ applications. Interswitch has also identified Zenith Bank and FirstBank among its banking partners in the broader rollout, alongside GTBank, Wema Bank and ProvidusUnity Bank.

For consumers, the potential benefits include less reliance on physical cards, simpler checkout and reduced exposure of original card details during supported transactions. Businesses could also benefit from faster payment processes and additional digital payment options.

Nevertheless, tokenisation does not eliminate every form of payment fraud. Customers still need to protect their devices and banking credentials, while financial institutions and merchants must maintain appropriate security controls.

The push by Interswitch and its partners signals another step in the development of Nigeria’s digital payments ecosystem. Wider adoption will depend on how effectively the technology is introduced, how many merchants support it and whether customers find it reliable and convenient for everyday use.

Reporting by TalkNaijaMedia