Finance

Nigerian banks suspend Int’l transactions on Naira visa debit card

Only CBN can direct us on old Naira notes — Banks

With increasingly harsh operating environment, some Nigerian banks have again suspended international transactions on naira cards.

This is coming after the banks last year, notified customers that they were set to suspend international transactions on Naira visa debit cards by December 31, 2022.

In a recent directive signed by heads of deposits, debit cards and mortgages, they also said this latest suspension was done to provide their customers with best-in-class financial solutions.

Commercial banks in the country had earlier reduced their monthly international spending limit on Naira cards in March 2022. The United Bank of Africa (UBA) was first to take the decision when it announced $20 as its new limit.

“In line with our promise to keep you updated on services, we have reviewed Naira Card limits for international transactions, and this will take effect 1st of March, 2022. Remember you can use your UBA Dollar, Pounds or Euro Card for international POS, ATM and web transactions. If you do not have one and would like to subscribe, please visit a branch close to you.”, It said

Zenith Bank followed suite later by informing its customers that it will no longer be able to carry out any international transaction on their naira Automated Teller Machine (ATM) cards effective from January 9th, 2023. This came after GTCO made the same announcement, which took effect on January 1. 

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This announcement further compounds the troubles of many Nigerians who shop online from international stores like Amazon, and Apple Music, among others as they will no longer be able to pay with their naira cards.  

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Zenith Bank’s announcement increased the number of banks that have suspended international transactions on naira cards, including First Bank and Standard Chartered Bank. 

Several Nigerian banks had announced a $20 spending limit on international transactions due to the prolonged scarcity of foreign exchange and the Central Bank of Nigeria (CBN)’s strict capital control regime. 

Daily Sun also observed that Flutterwave, Eversend, and other fintech platforms had also stopped virtual card services for international transactions. 

Reacting to the development, a financial analyst who craved anonymity, noted that the restriction as well as the reduction were related to the scarcity of FX that has hit the economy.

Read:  Naira exchange rates December 2022

His words, “I am not even surprised this is happening due to what the Central Bank of Nigeria (CBN) did in drastically reducing how much of FX it sells to the banks. I had initially applauded them for not selling to the BDCs but with what is happening, that act has given room for the demand in the black market now.

So, these banks are thinking aloud that with the exchange rate increasing daily, there is a risk for them if they allow customers to spend their Naira debit cards for international transactions. This also means that we have to start looking at alternatives.”

Sunnews

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