Secure Foreign Card Transactions Nationwide, CBN Mandates Banks

The Central Bank of Nigeria (CBN) has instructed deposit money banks and non-bank acquirers to introduce multi-factor authentication for foreign-issued card transactions that exceed $200 daily.

The directive was contained in a circular dated December 18 and signed by Rita Sike, director of the financial policy and regulation department. The apex bank also extended the authentication requirement to transactions above $500 weekly and $1,000 monthly, while directing operators to configure point-of-sale (POS) terminals for foreign card usage.

According to the CBN, the policy is aimed at ensuring smooth and efficient access to local currency withdrawals, payments and transfer services for users of foreign cards across the country.

The regulator said the initiative is designed to expand access to funds, strengthen transaction security and improve user experience for tourists and Nigerians in the diaspora visiting Nigeria.

Banks ordered to enable international card acceptance

The CBN further directed banks and non-bank acquirers to configure all automated teller machines (ATMs), POS terminals and virtual terminals to accept international cards through Nigerian acquirers. Institutions were also told to fully comply with card association standards and obtain the required certifications to support seamless transaction processing.

In addition, financial institutions were instructed to ensure continuous system availability to avoid transaction disruptions.

“In this regard, banks and non-bank acquirers shall: implement multi-factor authentication for all withdrawals and online transactions exceeding $200 per day, $500 per week, and $1,000 per month (or its equivalent),” the circular stated.

“With respect to ATM cash withdrawal transactions, ensure compliance with approved cash withdrawal limits.

“Clearly communicate the applicable exchange rate, which shall be market-driven and based on the prevailing official rate, as well as other associated charges to users. Transactions should only be completed after the user has accepted the terms (with evidence obtained).

“Maintain sufficient liquidity position to settle transactions.

“Settle transactions for the merchant in local currency (naira).

“Implement transaction monitoring to detect unusual patterns in the use of foreign cards across all terminals.

“Strengthen know-your-customer and anti-money laundering controls for merchants handling foreign card payments.

“Require their merchants to ensure that all their copies of card-present transaction receipts are properly signed and to request for valid identity documents where a transaction appears suspicious.”

The apex bank also instructed banks and acquirers to report suspicious transactions to the Nigeria Financial Intelligence Unit (NFIU) and fine-tune fraud monitoring systems to reduce wrongful declines of genuine transactions.

The circular further mandated that card acceptance devices support contactless payments for low-value transactions and that consumer complaints be resolved within approved timelines, warning that unresolved cases escalated to the CBN would attract sanctions.

“Furthermore, acquirers shall implement and maintain robust, auditable chargeback management processes aligned with applicable card-scheme rules and CBN guidelines (including but not limited to timely case intake, evidence collation, refund execution, and post-incident analytics),” the bank said.

“Require, verify, and retain documentation (including terminal approval slip and signed merchant receipt, and item/service description) for card transactions for use in dispute resolution and chargebacks. The records shall be retained for a minimum of 12 months and be readily retrievable within 24 hours of request by the Acquirer or Scheme.

“Provide quarterly training to their merchants and agent networks on dispute handling and chargeback processes.”

The CBN advised tourists and returning Nigerians who experience difficulties using foreign-issued cards to report such incidents to its consumer protection department via [email protected].

The regulator said compliance with the directive will be closely monitored, warning that appropriate sanctions will be imposed on institutions that fail to adhere to the guidelines.