American Express debuts credit card in Nigeria in partnership with O3 Capital

American Express Co. has made its debut in the Nigerian market, introducing its inaugural business credit card in collaboration with local neobank O3 Capital. 

This strategic partnership holds immense promise for businesses operating in Nigeria, offering a potential solution to the persistent challenge of dollar scarcity bearing heavy adverse effects on the country’s economy.

Unveiled in Lagos, Nigeria’s bustling commercial hub, the newly launched American Express Business Card boasts a generous spending limit of $10,000 for businesses, accompanied by a repayment period of up to 45 days for international transactions. This offering signifies a significant step towards enhancing dollar accessibility for Nigerian businesses, potentially mitigating the volatility of the naira and fostering stability in the country’s financial ecosystem.

Moreover, other O3 Capital-Amex cards, designed for personal and household purposes, will include spending limits ranging from $10,000 to $20,000.

Mohammed Badi, President of Global Network Services at American Express, conveyed the company’s enthusiasm for its expansion into Nigeria and the broader African market. He noted American Express’s commitment to supporting local businesses in their growth endeavors.

“The first-ever American Express Business Card in the most populous African country will give us another way to support local businesses with their growth aspirations. American Express is excited to continue to strengthen its presence in Nigeria and expand its reach across Africa,” he said.

This move aligns with American Express’s overarching strategy to extend its footprint across Africa, tapping into the continent’s burgeoning economic potential and underscoring its dedication to serving diverse markets.

The partnership between American Express and O3 Capital seeks to address the multifaceted challenges stemming from Nigeria’s persistent dollar scarcity, which has exerted significant pressure on the naira and contributed to economic uncertainty. Since the foreign exchange reforms implemented in mid-2023, the naira has witnessed a staggering depreciation, losing 65 percent of its value against the U.S. dollar.

Despite efforts by the Central Bank of Nigeria (CBN) to encourage banks to independently source dollars, accessing foreign currency remains a daunting task for many businesses. Consequently, most Nigerian banks have imposed restrictions on the use of naira-denominated credit cards for international transactions, limiting such services to an affluent clientele.

Abimbola Pinheiro, CEO of O3 Capital, noted the transformative impact of the newly introduced card, highlighting its ability to streamline business operations and alleviate the inconvenience associated with traditional banking processes. 

“The O3 Amex card solves the problem of queuing at banks for business travel allowance and personal travel allowance,” Pinheiro remarked, noting the card’s utility in facilitating seamless transactions for businesses and individuals alike.

American Express’s foray into the Nigerian market is not unprecedented, as the company previously announced a partnership with Interswitch Nigeria in February 2020. This strategic collaboration aims to leverage Interswitch’s extensive user base to expand American Express’s presence in Africa, particularly in Nigeria. By integrating their payment networks, the partnership facilitates a wide range of transactions for American Express card members, including ATM withdrawals via Interswitch.

Moreover, the partnership holds mutual benefits for both parties, enabling Interswitch to tap into American Express’s global network and extend its reach into the Americas. 

In light of the ongoing forex crisis orchestrated by dollar illiquidity, the newfound partnership between American Express and O3 Capital is expected to make a significant difference, providing businesses with much-needed access to foreign currency and offering a lifeline for international transactions.