The Central Bank of Nigeria (CBN) has directed banks and other financial institutions to use multi-factor authentication for transactions with foreign-issued payment cards.
The directive is part of new guidelines to boost security and make things easier for users across the country.
The directive is contained in a circular dated December 18, from the Financial Policy and Regulation Department of the Central Bank, signed by its director, Rita I. Sike.
The circular, called “Facilitation of Seamless Use of Foreign Cards,” says the rule will apply to all withdrawals and online transactions over $200 per day, $500 per week, and $1,000 per month, or the same amounts in naira.
The Central Bank said this change is meant to make transactions safer and improve the experience for tourists and Nigerians coming back from abroad.
The circular read, “All banks and non-bank financial institutions are required to impleme $500 per week, and $1,000 per month (or its equivalent).”
The CBN further told banks and non-bank acquirers to make sure people using foreign-issued cards can always withdraw, pay, and transfer local currency anywhere in Nigeria, adding that financial institutions must maintain high system availability to guarantee seamless transaction processing.
According to CBN, banks must fully follow global card association standards. Terminals need to have the right certifications or renewals to make sure card transactions work smoothly.
With the new rules, all payments to merchants from foreign card transactions must be done in naira. Financial institutions must also keep enough funds to meet their payment obligations on time.
To curb fraud, the CBN directed banks and acquirers to deploy robust transaction monitoring systems capable of detecting unusual usage patterns involving foreign cards across all terminals.
Merchants, who take foreign card payments must go through extra know-your-customer and anti-money laundering checks. If transactions appear suspicious, merchants must request valid means of identification and ensure that card-present transaction receipts are duly signed.
Suspicious transactions, the circular noted, must be reported promptly to the Nigerian Financial Intelligence Unit in line with existing regulations.
The regulator stressed the need for clear pricing and settlement. Banks and acquirers must tell customers the exchange rates before finishing any transaction.
According to the CBN, exchange rates for foreign card transactions must follow the current official market rate, and all charges must be shown to customers before the transaction.
The CBN said transactions should only be completed after users have explicitly accepted the terms, with evidence of such acceptance properly retained.
The Central Bank also told acquirers to hold training every quarter for merchants and agent networks on how to handle disputes and chargebacks.
The CBN warned that complaints from foreign card transactions must be settled within the set time limits. If issues are sent to the CBN, there will be penalties.
It advised foreign tourists and Nigerians coming back from abroad who have trouble using foreign-issued cards should report these problems to the CBN’s Consumer Protection and Financial Inclusion Department.
For small transactions, the circular said card readers must have contactless payment options.
The CBN has stricter for settling disputes over charges required to maintain robust, auditable chargeback management processes in line with applicable card scheme rules and CBN guidelines.
