Nigerians can now make international transactions with naira debit cards after 3 years

Nigerian banks have announced that Naira cards can now be used for international transactions. The development comes after the service was halted for about three years when Nigerian financial institutions suspended transactions on naira debit cards.

According to an announcement from the United Bank of Africa (UBA) and Wema Bank to their customers, they explained that the feature is now available on their naira debit cards.

“In line with our continued commitment to providing you with seamless and enhanced banking experiences, we are pleased to inform you that all UBA Premium Naira Cards, including Gold, Platinum, and World variants are now enabled for international transactions,” a statement from UBA reads.

UBA explained that the shift aligns with its strategic effort to provide customers with a seamless and quality banking experience. It noted that customers can now use their Premium Naira Card for daily payments, online shopping, POS, and ATM transactions across the world, with more ease and flexibility.

“If you haven’t used your card recently, now’s a great time to rediscover the convenience and prestige that comes with being a UBA premium cardholder,” it added.

Wema Bank also announced to its customers that they can now pay in dollars using their naira cards.

“Your Wema Naira Mastercard just went global! Now you can pay in dollars on all your favourite international platforms; Amazon, eBay, AliExpress? Netflix, Spotify, YouTube,” the bank said.

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What led to the suspension

Around 2022, Nigerian banks started suspending international transactions on naira debit cards due to a persistent scarcity of foreign exchange (FX). The scarcity forced the financial institutions to reduce spending limits and eventually suspend international transactions to manage the limited dollar supply.

According to experts, the scenario reflects the outcome of the Central Bank of Nigeria’s (CBN) managed exchange rate regime and the country’s reliance on oil revenue. The development likewise threatened the survival of key sectors of the Nigerian economy.

Between July 2022 and January 2023, several Nigerian financial institutions temporarily suspended international transactions on ATMs and POS channels.

In July 2022, Standard Chartered Bank suspended international transactions on its naira Visa debit card, while First Bank of Nigeria (FBN) suspended international transactions on its naira Mastercard in September 2022. 

In December 2022, Guaranty Trust Bank (GTB) stopped global payments on its naira Mastercard, while Zenith Bank, Flutterwave, and others also announced the suspension in January 2023.

What changed for Nigerian banks?

The resumption of international transactions on naira cards reflects improved liquidity in the foreign exchange market and reduced arbitrage opportunities. 

According to experts, the decision is influenced by the moderating premium on the parallel market transactions and the naira’s appreciation against major currencies. Additionally, increased diaspora remittances and restored confidence in FX management by the federal government and the CBN’s new policy on non-residents significantly contributed to this development. 

Other factors that contributed to the re-adoption include improved credit rating, clearance of FX backlogs, a new trading platform, increased oil prices, and bank capitalisation. These developments created a more favourable environment for FX transactions, leading financial institutions to reactivate their naira cards for global use. In addition, they stressed that high interest rates in Nigeria have reduced speculation on FX.

The reactivation of Naira cards for international transactions represents a pivotal shift for Nigerians and the economy as a whole. With this move, Nigerians can now use their Naira cards for international transactions, online shopping, and payments, making it easier to engage in global trade. In addition, the activation boosts transactions of individuals and small businesses who rely on international transactions.