Nigeria has witnessed a remarkable 291% surge in closed-loop prepaid card usage between 2021 and 2024, according to a report by global market research firm Euromonitor International. This growth highlights the increasing adoption of cashless payments, particularly in the country's largely informal transportation sector.

Closed-loop prepaid cards, which are preloaded with funds but can only be used within a specific network or with designated merchants, have seen a significant uptake in Nigeria. The number of closed-loop prepaid card transactions in the country jumped from 2.2 million in 2021 to 8.6 million in 2024, with transaction value rising from ₦6.16 billion to ₦18.03 billion over the same period.

TAP Technologies Limited, the fintech company behind the Cowry card for Lagos' train and Bus Rapid Transit (BRT) systems, has been instrumental in driving this growth. As the primary payment provider for Lagos State's mass transit system, TAP has seen its Cowry card user base grow to over five million, up from 3.8 million in 2023. CEO Olamide Afolabi revealed that 552,000 cards were issued in 2024, surpassing the 400,000 issued in 2023, with the company processing over ₦20 billion in transactions last year.

The Cowry card, which is sold for ₦1,000, is a contactless payment card powered by near-field communication (NFC) technology, enabling users to pay for bus and train rides. Funds can be added through the Cowry Wallet app, which also offers a pay-with-phone feature, although most commuters prefer to top up via bank transfers or agents. The convenience and ease of use of the Cowry card have made it a popular choice among commuters, with many praising its user-friendly interface and seamless payment experience.

The growth in card usage demonstrates how technology can subtly influence consumer behavior, even in unstructured markets. According to Uchenna Uzo, professor of marketing at Lagos Business School, "It underscores the critical role of user adoption in Nigeria's payment ecosystem—a market that deserves close attention. A thriving retail sector depends on a seamless digital payment system."

The partnership between TAP and SmartCash Payment Service Bank, a subsidiary of Airtel Nigeria, to introduce new top-up features for Cowry cards has further enhanced the user experience. As adoption spreads, the sector is expected to further integrate digital payments, making seamless, cash-free travel a reality for millions.

While challenges remain, there is growing awareness of the benefits of a cashless transportation system in Nigeria. The rise of prepaid cards is linked to road infrastructure developments and the launch of the Lagos Blue Line train, which has driven demand for Cowry cards since their introduction in 2021. As the country continues to invest in its transportation infrastructure, the demand for cashless payment solutions is expected to grow, driving innovation and growth in the fintech sector.