In a significant development, several Nigerian Deposit Money Banks (DMBs) have recently reinstated the use of naira cards for overseas transactions. This move comes as a positive sign amidst improving conditions in the foreign exchange (FX) market. The banks leading this initiative include Providus Bank, First Bank of Nigeria, Guaranty Trust Bank (GTBank), United Bank for Africa (UBA), and Wema Bank.
GTBank, for instance, has introduced a quarterly international spending limit of $1,000 for its Naira card users. Customers can now withdraw up to $500 from ATMs abroad and spend up to $1,000 on online platforms and POS channels within a three-month period. Similarly, First Bank has set an international usage limit of $500 monthly with specific transaction frequencies across different channels.
“Customers can carry out up to 10 cross-border ATM withdrawals per month at a charge and perform transactions on POS and web platforms with no added cost,”
explained a representative from First Bank.
Providus Bank notified its customers about an enhanced international spending limit during the summer season with its Platinum Naira Card. However, the precise ceiling was not disclosed by the bank. On the other hand, Wema Bank has resumed international transactions on its naira-denominated debit cards with a monthly spending cap of $500.
This recent development marks a turnaround from previous stringent measures when Nigerian banks had slashed international spending limits on naira cards due to severe dollar shortages and FX volatility. This restriction significantly impacted individuals and businesses alike, disrupting access to essential foreign goods and services.
The decision to resume overseas card transactions aligns with policy recommendations from experts like Razia Khan, managing director and chief economist for Africa and the Middle East at Standard Chartered Bank. She highlighted that this step is in line with IMF suggestions regarding capital control measures in light of Nigeria’s floating exchange rate regime.
Ayodeji Ebo, an investment professional at Optimus by Afrinvest, echoed these sentiments by stating that this move demonstrates positive outcomes arising from current FX reforms. He emphasized that improved liquidity in Nigeria’s official FX market is gradually shifting demand back to official channels while narrowing the gap between different exchange rates—a positive trend for the economy.
Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise (CPPE), credits improved liquidity and stability in the FX market for enabling Nigerian banks to reopen international transactions using Naira cards. According to him, this development has reinstated confidence among financial institutions and their clientele.
“For Nigerians traveling abroad or conducting foreign transactions,”
Yusuf remarked,
“the ability to use naira cards offers unparalleled convenience.”
The resumption of international transactions using naira cards not only signifies renewed confidence in FX liquidity but also provides much-needed relief to consumers who rely on these services for various purposes like online subscriptions and travel expenses. It underscores a positive shift towards stability in Nigeria’s FX landscape—a welcomed change benefiting both consumers and investors alike.
