Banks suspend international transactions on naira cards

Naira cards will no longer be accepted for international online and Point of Sale (PoS) transactions, according to Nigerian banks, which would reduce the amount that customers using dollar cards may withdraw from foreign ATMs.

Customers of several banks have already been informed of the most recent development.

Starting on December 31, 2022, GTBank will no longer accept naira cards for online or point-of-sale transactions.

In its mail to customers, GTCO said: “Update on Your Naira Card for International Spending, 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. You can use your GTBank dollar card for all your international spending requirements.”

This is closely related to the initiative to cut back on American spending abroad and conserve foreign currency for the economy.

On September 30, First Bank of Nigeria Limited banned all overseas transactions using its naira Mastercard.

“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.

In July, Standard Chartered Bank stopped allowing foreign purchases with its naira visa debit card.

Fintech companies have stopped offering virtual card services for cross-border transactions, along with Flutterwave, Eversend, and other fintech platforms.

The monthly cap on overseas spending for naira cards was reduced by financial institutions in March from $100 to $20.

Customers received an email from Zenith Bank Plc describing the new international payment plan.

 The bank said: “Please be informed that we have temporarily suspended the use of Zenith Bank Naira cards for International Automated Teller Machine (ATM) cash withdrawals and 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 sterling debit or credit cards if they wanted to do transactions with foreign currency.

Banks have, however, limited the total monthly amount of foreign exchange transactions that clients can make using their naira debit or credit cards at ATMs and Point of Sale (PoS) terminals abroad in recent months.

Findings revealed that certain banks had reduced their daily foreign ATM withdrawal limit from the $300 recommended by the Bankers Committee of the Central Bank of Nigeria to $100 because they were unable to find enough dollars to finance the transactions.

The indiscriminate and questionable ways in which some bank clients used their naira debit cards to make purchases abroad in dollars and other foreign currencies had already alarmed the Central Bank of Nigeria (CBN). The CBN had mandated that bank customers who exceeded the $50,000 annual forex limit it imposed would be implemented, and defaulters sanctioned. This was done to reduce forex spending abroad.

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