Naira cards no longer work for foreign transactions

Posted by Felix Okoli on Monday January 4, 2016 at 11:11:54:

There seems to be a ban placed by Nigeria's banking industry on the use of Naira cards for foreign transactions. Irrespective of whether they are debit or credit cards, foreign transactions with Naira cards no longer seem to be working as the CBN still struggles to keep up with the demand for foreign currency amidst the fall in the nation's foreign income from crude oil.

One of the things the Central bank of Nigeria is now doing is making policies that aims to restrict access to foreign currency by Nigerians especially the importers.

In the past, Nigerians used to be able to receive foreign currencies through Western Union but today it's no longer allowed and in the past, Nigerians could easily send money abroad to foreign accounts but today that has even been restricted to only specific transactions.

In the past and before Nigerians started using ATM debit cards, they could only make withdrawals from their bank by being physically present and using a withdrawal slip but later on as cards rolled in, they were able to make withdrawals anytime just by using their debit cards on ATMs which were available for 24 hrs. Those ATM debit cards however could not be used for foreign transactions because they were not powered by international card processors like Visa or Mastercard but as partnership with those brands were made, Naira cards were then able to make foreign transactions.

With the latest policy by the banks and CBN to restrict the use of Naira debit cards for foreign transactions, it's like Nigerians are going back to the past and one would still wonder if it's still of any benefit to own a Visa or Mastercard when one can just get a locally powered card like Verve.

As it stands now, Nigerians banks are however re-introducing foreign currency debit cards which had been popular in the past before Naira cards became empowered to carry out foreign transactions. These foreign currency cards would need to be funded in foreign currency by the account holder before being used to make foreign transactions. The funny thing is that Nigerians are expected to fund those cards with currency they purchased from the black market or that they have in their domiciliary account as they can't fund it directly with the Nigerian Naira or at the bank's rate.

It's a bit disturbing that Nigerian banks which operate within Nigeria would be issuing debit cards in foreign currency just for their customers to be able to make foreign transactions when that feature should also be available for Naira cards.

Well, the bottom line now is that if you still want to get a debit/credit card from a bank in Nigeria that you can use for foreign transactions such as in a foreign country or website, then you'd need to get a foreign currency card and be the one to fund the card with foreign currency. Naira Visa or Mastercard branded cards are no longer working outside Nigeria for now. So, online shoppers and travellers from Nigeria should take note of this.