The Central Bank of Nigeria (CBN) has issued a directive to all banks and non-bank acquirers to reconfigure their Automated Teller Machines (ATMs) and Point-of-Sale (POS) terminals to accept international payment cards.
This development was announced on December 18, to eliminate the difficulties faced by tourists and Nigerians in the diaspora when attempting to withdraw Naira or make payments using foreign-issued cards. This has often forced visitors to rely on the parallel (black) market for cash.
The CBN has introduced Multi-Factor Authentication (MFA) requirements for foreign card transactions. To prevent fraud, any foreign card transaction exceeding $200 per day now requires Multi-Factor Authentication such as OTP or biometric secondary check.
All banks are forbidden from hiding exchange rates. The terminal must display the official rate and all associated fees, seeking the approval of the user before the transaction completes.
Merchant or ATM receiving any foreign cards, must settle the transaction in naira, in order to boost the demand for the national currency.
The CBN directives, signed by Rita Sike, outline several new must dos for financial institutions.
First, merchants must keep signed receipts and valid ID copies for suspicious foreign card transactions for at least 12 months.
Second, all terminals must now support “Tap-and-Go” contactless options for low-value transactions to speed up checkout times.
Third, banks must resolve disputes within approved timelines. Failure to do so will result in direct sanctions from the apex bank.
Lastly, all banks must ensure they have enough Naira liquidity to meet the withdrawal demands of foreign cardholders.
The framework is designed to improve access to funds, enhance transaction security, and boost overall user experience for foreign cardholders… Institutions must maintain high system availability to guarantee uninterrupted processing – Rita Sike, Director of Financial Policy and Regulation
The CBN has warned that it will conduct spot checks during the Christmas and New Year holidays. Banks found to be manually disabling foreign card acceptance to avoid settlement stress will face heavy fines.
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