Standard Chartered Bank, one of Nigeria’s leading commercial banks, has today communicated to its customers that it will suspend the use of its Naira debit card internationally from the 1st of August 2022.
This follows a successive cut in debit card limits on international spending by other major Nigerian banks earlier this year.
The bank communicated this through a mail signed by its Head of Deposits, Debits card and Mortgages. It has therefore called on its customers to seek alternative means to sort out their foreign spending.
What they said:
“Kindly be informed that effective August 1, 2022, International spend on our Naira visa debit card will be suspended.” It however reiterated that the limit on the bank’s credit card remains the same. “International spend limit on our bank credit card however remains at $1,000 monthly and foreign currency debit card limits remain unchanged.”
Read also: All you need to know about CBN’s open banking guideline for fintech and banks
What we think
The decision to suspend the usage of their debit cards internationally might not be far-fetched from the scarcity of foreign exchange. There had been reports that many banks had in the first quarter of the year, cut down their monthly international spending limit on Naira cards.
Nigerians home and abroad have not been finding it easy to pay for services with their debit cards since the first wave of restrictions imposed by the Nigerian financial regulator due to the pandemic in 2020.
This has been compounded by the worsening exchange rate conditions and CBN restrictions on disbursing forex to commercial banks.
The United Bank for Africa (UBA) was first to take the decision on February 24, when it announced that its new limit of $24 would take effect from the 1st of March, 2022. In March, other banks like Zenith and First bank followed suit by reducing their spending limits to $20 and $50 respectively, with the banks citing the scarcity of foreign exchange.
Since then, Guaranty Trust Bank (GTB), Sterling Bank, and Union Bank have also reduced their limit from what obtains before to a new normal, to the disadvantage of their customers. In the case of Wema bank, it was a total suspension of their cross-border payments on March 14.
This new wave might actually result in more worsened situations for Nigerians who constantly travel outside the shores of this country and carry out numerous transactions using their Naira debit cards.
New and bigger challenges
This new development by Standard Chartered Bank would no doubt pose new challenges to Nigerians, considering that the bank is one of the biggest banks both domestically and beyond the shores of the country.
Nigerians would likely find it difficult to pay for so many things which would include payment for online courses on platforms rendering these services, physical and online shopping abroad, payment for streaming platforms, and many other limitations.
With Nigeria’s apex bank, the Central Bank of Nigeria discontinued the sale of forex to BDCs and also stated that it would stop the sale of forex to Deposit Money Banks (DMBs) by the end of 2022, Nigerians might just brace themselves up for reduced banking and financial transactions outside the shores of the country.
No doubt businesses will suffer in the end due to the unavailability of forex by banks and other institutions. This would also reduce the number of travels drastically, as well as reduce health, Education tourism.
We recently reported that the travails of Flutterwave and other African fintech pertaining to discontinuing their virtual dollar card might not be unconnected to the Union54 shutdown.
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