*Several Nigerian banks have informed consumers of their financial products and services, that effective August 1, international transactions on Naira Visa Debit Cards will be suspended

Gbenga Kayode | ConsumerConnect

With the increasingly harsh operating environment, several Nigerian banks have started notifying their customers that they are ready to suspend international transactions on Naira Visa Debit Cards by August 1, 2022.

ConsumerConnect reports the commercial banks, in recent directives to account holders, noted that the development is meant to provide their customers with best-in-class financial solutions.

Hitherto, a number of Nigerian banks were said to have reduced their monthly international spending limits on Naira cards as of early March 2022.

The United Bank of Africa (UBA) Plc, for instance, was first to take the decision when it announced $20 as its new limit.

The financial institution has said: “In line with our promise to keep you updated on services, we have reviewed Naira Card limits for international transactions, and this will take effect 1st of March, 2022.

“Remember you can use your UBA Dollar, Pounds or Euro Card for international POS, ATM and web transactions. If you do not have one and would like to subscribe, please visit a branch close to you.”

Zenith Bank Plc followed suit by informing its customers that it was reducing its international spending limit on its Naira cards to $20 and it was suspending international ATMs and point of sales (POS) transactions.

The financial institution also halted Point of Sales (POS) transactions on the International Automated Teller Machine (ATM).

It explained that it is the bank’s latest Management’s decision informed by economic realities in Nigeria.

Likewise, Standard Chartered Bank, in its communication to its customers that the international spend limit on its Credit Card, however, remains at $1,000 monthly and Foreign Currency Debit Card limits remain unchanged.

The bank has notified the consumers of its products and services, that it is set to suspend international transactions on Naira visa debit cards by August 1, 2022.

“Kindly be informed that effective August 1, 2022, International spend on our Naira Visa Debit Card will be suspended,” said Standard Chartered Bank.

The bank also appreciated its customers, saying: “Thank you for banking with Standard Chartered Bank. “As always, we remain committed to providing you best-in-class financial solutions.”

By implication, the banks informed their customers they they are set to limit foreign transactions on the cards from $100 to either $20 or $50 a month.

It means customers would not be able to use their Naira debit cards to pay for any transactions more than $20 or $50 in a month, experts said.

It is an indication of the banks’ struggle with scarcity of foreign exchange in the economy as of now.

However, some other banks in the country have revealed that they will not follow the path of the Standard Chartered in this regard, reports The Sun.

Such banks, nonetheless, noted that their  Managements might be forced to embark on some strategies to see how they could adjust to the current Foreign Exchange (Forex) scarcity confronting businesses in the country’s economy.

Speaking on the situation, a financial analyst who craved anonymity, noted that the restriction as well as the reduction is related to the scarcity of Forex that has hit the economy.

The expert also stated: “I am not even surprised this is happening due to what the Central Bank of Nigeria (CBN) did in drastically reducing how much of FX it sells to the banks.

“I had initially applauded them for not selling to the BDCs but with what is happening, that act has given room for the demand in the black market now.”

The commercial banks are thinking aloud that with the exchange rate increasing daily, there is a risk for them if they allow customers to spend their Naira debit cards for international transactions. “This also means that we have to start looking at alternatives,” the source noted.

ConsumerConnect reports the Nigerian currency, Naira, exchanged for N720  to a US Dollar in the black market as of Thursday, July 28, 2022.