Come January 1, 2016, all transaction denominated in foreign currencies will no longer be possible with Naira denominated cards. Nigeria popular debit cards known as the Automated Teller Machine (ATM) card which is usually issued to most account holders in the country will no longer work for international transaction. This of course will affects Nigerians using their ATM cards to shop on websites like Amazon, Aliexpress, ebay, Alibaba etc or any payment type in forex.
This directives given by the regulating bank CBN to commercial banks is in line to curtail the scarcity of foreign exchange, especially the dollar, to settle obligations arising from customers’ use of the ATM cards for forex-denominated transactions.
Though the directive which ought to take effect from January 1, 2016, has witness some banks like UBA, Standard Chartered to have commence the process. This will affects Nigeria importers who shop on foreign sites as well as people traveling abroad.
In a notice to its customers, Standard Chartered said, “This is to notify you that from January 1, 2016, your naira card will no longer be enabled for international use. This is as a result of the limited foreign exchange supply in the financial market.”
Asked how long the suspension of cards from international transactions would be, the spokesperson for Standard Chartered Nigeria, Mrs. Dayo Adurogbo, said, “We cannot give a definite date. It depends on how soon it is available. We will do everything to meet our customers’ demand once it is available.”
WHAT IS THE WAY FORWARD?
If you do online business / payments, trade forex, or into buying of goods / services from any of the international site denominated in dollars, pounds, euro etc, the best option will be to optin for a domiciliary account and apply for a true international Master or Visa card which will give you more waiver than the Nigerian ATM cards.
Another way out will be to open a payoneer account at payoneer.com which is FREE and apply for a Payoneer card. Payoneer cards are international Visa/Master card given to owners of the account which is a US bank account. They will send the card to your country of residence which one can also linked it to USA Paypal account.
Until then, one won’t be able to use his/her Nigerian ATM card to carry out a foreign transaction which also means customers travelling abroad for Christmas and New Year may face severe payment challenges, a situation that may mar their shopping plans.
The fall in prices of crude oil, the main earner of foreign exchange for Nigeria, has made the nation’s forex income to reduce drastically, creating dollar scarcity crisis for the Central Bank of Nigeria.
The CBN has been rationing dollar to banks, importers and other forex users as the nation’s foreign exchange reserves continue to deplete, hitting $29.4bn on December 7, 2015.
Skye Bank Plc, in a notice to its customers via email, also slashed its international card spending limit from $50,000 to $12,000 annually, a maximum of $1,000 monthly and $100 daily.
Wema Bank Plc also slashed spending on its payment cards from $50,000 to $10,000 annually, $1,000 monthly and $100 daily.
Although other banks have yet to confirm their new international card spending limits, findings by our correspondent revealed that the new limits for most of them ranged from $5,000 to $15,000 annually, and $500 to $1,000 monthly.