Nigerian startup Payday has announced a temporary suspension of its partnership with its Mastercard provider. In a statement released to customers, the company claimed its partnership with Mastercard was not meeting the its standards.
“We are committed to providing you with the best virtual cards experience; be it with Mastercard or VISA. To ensure this, we are partially pausing our partnership with our Mastercard provider, as their services haven’t matched our promise to you.”
With this decision, Payday is shifting its focus to its VISA card service. Mastercard users will temporarily be unable to create new cards as the company reassesses its partnership due to service inconsistencies. However, the creation and usage of VISA cards remains unaffected and users are encouraged to utilize this service for their virtual card needs.
The specifics of these service deficiencies have not been disclosed, but the implications are significant enough for PayDay to partially suspend its partnership. The specifics of the Mastercard service issues remain undisclosed, fueling industry speculation about the complex dynamics between fintech startups and global card providers.
We reached out to Payday for further clarification on the nature of the service disruptions with Mastercard, but there was no response as of press time.
Payday and recent activity in the virtual card space
Payday’s decision to pause its Mastercard services arrives amidst recent challenges in the virtual card space, including chargebacks and insufficient funds. Other industry players have faced similar disruptions; for instance, Zambian startup Union54 was forced to shutter its virtual card services, pivoting instead to a super app model.
These disruptions have sparked discussions about the potential for local card schemes and alternative solutions in the fintech sector. Calls for a more resilient, locally-grounded system have intensified, hinting at possible future shifts within the fintech ecosystem.
Payday’s recent update underscores these concerns, and the industry will be keenly watching the company’s next steps as it strives to deliver on its promise of being the Neobank for the gig economy.
