Global acceptance of O3 American Express cards positive for FX demand— Pinheiro, CEO, O3 Capital

Credit cards, often issued by banks, are a versatile form of payment that has become a staple in the global economy. By allowing users to make purchases on credit, these cards offer a convenient and accessible way to pay for goods and services, as well as access cash advances.

O3 Capital, a Nigerian fintech company at the forefront of credit card penetration, has made waves in the financial landscape by becoming the country’s first non-bank issuer of credit cards. In the opening month of its American Express (Amex) card portfolio, O3 Capital observed an overwhelming response from customers, both in Nigeria and beyond, who are eager to access the benefits of credit cards.

Abimbola Pinheiro, the chief executive officer of O3 Capital, in an interview with Business a.m.’s Onome Amuge, discusses the rapid expansion of the company’s credit card portfolio and its tangible benefits for consumers in the Nigerian market. From the initial rollout to the present day, Pinheiro shared unique insights into the company’s growth, strategies, and impact on consumers. Excerpts:

Can you walk us through the decision to partner with American Express and launch a new credit card portfolio in Nigeria?

We wanted to offer solutions for a diverse customer base, ranging from consumers seeking greater value from their payment products to businesses desiring the advantages of a locally issued card with international acceptance. To offer such solutions, we needed a partner with the global reach of American Express. We are proud to have successfully partnered with American Express. We are especially proud to be the first to issue an American Express Business card to the Nigerian business community, and we are excited about collaborating with American Express to realise our full potential.

O3 Capital forged this partnership to enhance its overall customer offering in Nigeria and contribute to improving financial well-being in the country. Our cards, in collaboration with American Express, provide a range of travel and lifestyle benefits for use in Nigeria and when travelling overseas. These cards offer access to discounts at select businesses across Nigeria, cinema and dining perks, hotel and car rental benefits, and various insurances and protections.

What do you think has contributed specifically  to the strong demand for O3 Capital’s Amex cards?

At its most simple – we’re giving consumers and businesses exactly what they want and need – which they haven’t been able to easily access before. Dual (Naira/dollar) currency denomination is a key factor. Users feel more comfortable and secure transacting in their own currency, which they understand and use daily. Our credit cards enhance convenience, reduce costs, and increase trust and acceptance among Nigerian consumers, thereby making credit card use more popular and widespread.

For these reasons, the entry-level Green card has become immensely popular. It offers a practical and functional solution for the middle class to make payments in Naira on credit, while also being convenient for families with members studying abroad.

How do you believe these cards will impact Nigeria’s financial landscape and the credit market?

Our cards align with government initiatives aimed at promoting financial inclusion and reducing reliance on cash. The Central Bank of Nigeria’s (CBN) Financial System Strategy 2020 outlines ‘Cashless Nigeria’ as one of its primary goals, with credit cards playing a crucial role in this initiative. We are particularly pleased that the government has already acknowledged our work, underscoring the importance of O3 Capital’s contribution to the country’s financial ecosystem.

Can you share some details about the types of customers that are using these cards and their use cases?

The appeal is widespread, and interest is growing daily. Millennials and GenZ use Green Cards for subscriptions and online transactions, which are valid for two years, instead of virtual cards that are per transaction. Middle-class families have appreciated our Green cards for their practicality and functionality in making payments in naira on credit. They have proven particularly convenient for families with members studying abroad, especially for accessing monthly upkeep stipends. Techprenuers and Instagram businesses can order goods online across numerous e-commerce channels.

Our users include various financial institutions, asset management companies, and SMEs with trade partners in India, China, and other African countries. These companies, especially those with headcounts between 100 and 1,000, have shown significant interest, particularly for managing day-to-day cash flow items such as staff expenses. The financial institutions would be issuing the cards to their customers as a value-add.

What challenges did you face in bringing American Express credit cards to Nigeria and how did you overcome them?

Obviously, it was a big project involving numerous parties on different sides, and like any project of this scale, it was complex. However, we have the energy that pioneers require and were able to successfully navigate the journey. What matters now are our results – which are very exciting – and our future.

What led to the decision to create four different cards catering to different types of consumers and businesses?

Correct. We have issued four American Express® credit cards: the O3 American Express® Green Card, the O3 American Express® Gold Card, and the O3 American Express Platinum® Card for consumers, as well as the O3 American Express® Gold Business Card for small- and medium-sized enterprises (SMEs). Our aim was to accommodate various customer segments, ensuring broad appeal and assisting them in enhancing their financial well-being. There is something for all Nigerians!

Can you elaborate on the benefits and features of the Gold Card for consumers and the Platinum Card for high-spending individuals?

The O3 American Express Platinum® Card offers exclusive benefits including access to a travel and lifestyle concierge service, membership in a global hotel programme, and up to five complimentary visits per year to eligible local and international airport lounges. These cards are accepted at American Express merchants both in Nigeria and worldwide. The O3 American Express Platinum® Card has a $20,000 credit limit.

O3 American Express Gold® Card offers a lower credit limit of $10,000, yet it still provides travel and lifestyle benefits such as free travel insurance, discounts with specific car hire providers and accommodation / hotel discounts.

What specific needs of small and medium-sized enterprises did you consider when developing the Gold Business Card?

The O3 American Express® Gold Business Card is the first American Express card being launched in Nigeria to specifically support the spending needs of businesses. This card improves the day-to-day management of business transactions and cash flow with access to a credit facility, the ability to perform international transactions, and an extended repayment period of up to 45 days (the international standard is 28-30 days). The key offering is credit and convenient financial participation in the global markets. The card enables SMEs to pay foreign trades through payment links with suppliers/manufacturers from the convenience of their offices. Payments for goods and services at the premises of the supply/manufacturer are also simplified. It aims to support the running of a business, with benefits such as three complimentary visits per year to eligible local and international airport lounges, car rental perks, and travel insurance included.

Given the seemingly broad appeal of the Green Card and Platinum cards, what does this say about the appetite for premium financial products in the Nigerian market?

The Nigerian market is continually developing and evolving; hence there is undoubtedly a robust demand for such services. We are pleased to lead this development, contributing to the maturation of our economy.

How do you believe these cards can further develop Nigeria’s financial sector and enhance its economic growth?

Using a local currency card encourages spending within the country, thereby supporting local businesses and the economy. We take pride in bolstering the Nigerian economy through this initiative. As people feel more financially secure, they are likely to increase their local spending, thereby further supporting their country. We believe the “just-in-time” availability of the card and its global acceptance will have a positive impact on the FX demand by individuals and SMEs. Trust in the card ensures that cardholders receive service at the point of need in the required currency. Additionally, we are particularly glad to support SMEs and corporates, making working expenses easy and even enjoyable. This demonstrates our commitment to supporting small businesses and entrepreneurs on their paths to success.

With the increased attention from other financial players in the market, how are you evaluating potential partnerships and collaborations?

We are always looking to expand our offerings, so we would consider partnerships with other interesting companies that can bring value to the people of Nigeria.

How do you envision these partnerships enhancing the value proposition of O3’s credit cards for consumers and businesses?

We aim for our cards to serve as enablers of financial dreams for Nigerians and as helpful tools for businesses to grow their enterprises. The partnerships with other Financial Institutions would facilitate reaching more Nigerians.

Given your success with American Express, do you foresee expanding your partnerships with other global financial brands in the future?

It is premature to speculate about this, but we are ambitious about bringing positive changes to our country. If we have an opportunity to achieve this through partnerships, we will seize it.

Can you discuss the opportunities for O3 and its potential collaborators to drive innovation and disruption within Nigeria’s financial sector?

We will continue to support our government with Cashless Nigeria initiatives through various projects. However, it is too early to disclose any specific information at this time.