Nigerian banks have announced they will no longer process international internet and Point of Sale (PoS) transactions made using Naira cards, thereby limiting the amount of money customers may withdraw from foreign ATMs using dollar cards.
Some financial institutions have already informed their customers of the latest development.
After the end of 2022, GTBank will no longer accept naira cards for use in online and Point-of-Sale transactions.
After December 31 2022, GTCO informed its customers through mail that their Naira Mastercard would no longer be usable for international online and POS transactions. All overseas purchases can be made with a GTBank dollar card.
This ties in with the broader effort to bring down outbound dollar spending and bring in some much-needed foreign currency.
The First Bank of Nigeria Limited temporarily halted its naira Mastercard’s ability to be used for overseas purchases on September 30.
“Due to current market realities on foreign exchange, you will no longer be able to use the Naira Mastercard, Naira Credit Card, our Virtual card, and Visa Prepaid Naira card for international transactions. This will take effect on September 30 2022,” First Bank stated.
As of the beginning of July, Standard Chartered Bank no longer allowed its naira visa debit card to be used for overseas transactions.
Flutterwave, Eversend, and other financial platforms have discontinued virtual card services for cross-border transactions.
Since the beginning of March, the monthly limit on overseas spending that can be done with naira cards has been reduced from $100 to $20.
Customers in other countries received an email from Zenith Bank Plc explaining the revised payment terms. Zenith Bank issued the following statement: “Please be informed that we have temporarily suspended the use of Zenith Bank Naira cards for international Automated Teller Machine (ATM) cash withdrawals and Point-of-Sale (PoS) transactions.”
“Additionally, the monthly card spending limit for web transactions has been reviewed from $100 to $20. This review is in response to today’s economic realities.”
Customers of Stanbic IBTC Bank and Standard Chartered Bank Nigeria were urged to apply for dollar or pound-sterling debit credit cards to conduct transactions denominated in foreign currency.
However, banks have recently limited customers’ total monthly amount of forex-denominated transactions using their naira debit or credit cards at ATMs and PoS terminals abroad as online payments or transactions.
Banks could not obtain sufficient funds in the form of dollars; thus, some of them reduced the daily limit on ATM withdrawals made outside of Nigeria from the Central Bank’s Bankers Committee’s recommendation of $300 to $100.
The Nigerian government’s central bank, the CBN, has previously voiced its displeasure with the seemingly random and dubious nature with which certain bank customers were spending dollars and other foreign currencies abroad using their naira debit cards. The CBN had ordered that sanctions be applied to bank customers who spent more than the annual forex limit of $50,000 that it imposed to restrict foreign currency usage.
Importers carrying other items also had access to the interbank currency market limited by the CBN. The bank announced it would no longer issue foreign currency for importing 43 products ranging from toothpicks and rice to steel products and private aircraft to conserve its dollar reserves.
Customers attempting to make international payments to business partners using naira debit cards are also being denied.
Customers are asked to pay overseas clients in the local currency rather than the naira. In the past, lenders would deduct their customers’ naira accounts at the market exchange rate and wire the equivalent dollars to the account of an overseas beneficiary.