Banks stop naira cards for online, PoS transactions abroad

Banks have announced stoppage of use of naira card for International online and Point of Sale (PoS) transactions.
The banks also placed limits on how much a customer can withdrawal from offshore ATMs with dollar cards.

In one of the messages to customers, GTBank yesterday stated that it would no longer permit online and PoS transactions with naira cards effective December 31, 2022. It also said that use of dollar cards will have to comply with international spending requirements including a $1,000 daily limit or naira equivalent.

In the note titled “Update on Your Naira Card for International Spending” , the bank said:”We write to inform you that you will no longer be able to use your Naira Mastercard for international Oline and POS transactions effective 31st December 2022. Kindly note that you can use your GTBank dollar card for all your international spending requirements”.

The card restriction by banks is part of moves to reduce dollar spendings abroad and save foreign exchange for the economy.

First Bank of Nigeria Limited had suspended international transactions on its naira Mastercard from September 30.

Banks’ decision followed consistent dollar scarcity and challenges faced by manufacturers and other real sector operators in sourcing foreign exchange from the economy.

Banking sources said banks were increasingly finding it difficult to fund their foreign-currency denominated services, especially online forex transactions and overseas ATM withdrawals, as well as PoS usage overseas by customers.

First Bank said: “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 30 September 2022,” First Bank said.


“Please use your Visa Debit Multicurrency Card, Visa Prepaid (USD) Card and Visa Gold Credit Card to continue transacting abroad with limits of up to $10,000.”

In July, Standard Chartered Bank suspended international transactions on its naira visa debit card.

Fintech firms- Flutterwave, Eversend and other fintech platforms had also stopped virtual card services for international transactions.

In March, financial institutions cut the international spending limit on naira cards from $100 to $20 monthly.

In a recent statement to its customers, the bank said such transactions would not be available on its naira credit card, virtual card and visa prepaid naira card.

Zenith Bank Plc sent emailed note to customers on the new payment plan abroad. The bank said: “Please be informed that we have temporary suspended the use of Zenith Bank Naira cards for International Automated Teller Machine (ATM) cash withdrawals and PoS transactions.”

“Additionally, the monthly card spend limit for web transactions has been reviewed from $100 to $20. This review is in response to today’s economic realities.”

“If you have higher International spend requirements, simply visit any of our branches and request for foreign currency debit or prepaid card, which are available in US dollar, Pounds and Euro variants,” the bank said.

Stanbic IBTC Bank, Standard Chartered Bank Nigeria and Guaranty Trust Bank had few years back, announced the suspension of their overseas ATM card services.

Both Stanbic IBTC Bank and Standard Chartered Bank Nigeria advised customers seeking to carry out transactions denominated in foreign exchange to apply for dollar or pounds sterling debit credit cards.

According to them, the dollar or pounds sterling debit or credit cards will be linked to the customers’ domiciliary accounts.

This is despite the fact that the banks have in the past few months reduced the monthly total amount of forex-denominated transactions that customers can do, using their naira debit or credit cards via ATMs and PoS terminals abroad as well as online payments or transactions.

Findings showed that some banks had slashed their daily ATM withdrawal limit abroad from the $300 advised by the Central Bank of Nigeria’s Bankers Committee to $100 due to their inability to source for dollars to fund the transactions.

The Central Bank of Nigeria (CBN) had earlier expressed concerns about the indiscriminate and suspicious manner in which some bank customers were spending dollars and other foreign currencies abroad through their naira debit cards.

To reduce forex spending abroad, the CBN had directed that bank customers who spent above the $50,000 annual forex limit it imposed would be implemented and defaulters sanctioned.

The apex bank also took major steps to shore up dollar reserves in Nigeria and defend the naira.

For instance, CBN governor, Godwin Emefiele said banks should generate FX proceeds from exporters to give their customers (importers). The bank set $200 billion dollar earnings target to be achieved within three to five years.

The CBN also curbed access to the interbank currency market for importers bringing in a variety of goods. To conserve its dollar reserves, the bank said importers could no longer get hard currency to buy 43 items, ranging from toothpicks and rice to steel products and private jets.

The banks are also turning down payment requests from customers paying business partners abroad with naira debit cards.

They are now asking customers paying clients abroad to do so in the currency of the beneficiary’s country, not in naira. The new practice differs from the previous one where lenders debited the naira accounts of customers at the prevailing exchange rate and remitted dollar equivalent to the offshore beneficiary’s account.

<<The Nation>>