No more international transactions on Naira cards ― Banks

Banks in Nigeria have announced the stoppage of Naira cards for International online and Point of Sale (PoS) transactions, limiting how much a customer could withdraw from offshore ATMs with dollar cards.

Some banks have already told their customers about the latest development.

GTBank would no longer permit online and PoS transactions with naira cards, effective from December 31, 2022.

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 not unconnected to the move to reduce dollar spending abroad and save foreign exchange for the economy.

First Bank of Nigeria Limited, had, on September 30, suspended international transactions on 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.

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

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

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

Zenith Bank Plc sent emailed note to customers on the new payment plan abroad. 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.”

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

However, in the past few months, banks have reduced the total monthly amount of forex-denominated transactions that customers can do, using their naira debit or credit cards via ATMs and PoS terminals abroad 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 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 spent 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 CBN also curbed access to the interbank currency market for importers bringing various 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 dollars equivalent to the offshore beneficiary’s account.