Fear over use of credit cards overseas from January

Banks are giving conflicting conditions to their customers on use of both debit and credit cards abroad. While some lenders banned completely, use of the cards abroad, others specified countries where the cards are acceptable, The Nation has learnt.

The BBC quoted a source, saying the Central Bank of Nigeria (CBN) even ordered commercial banks to stop customers from using their debit and credit cards abroad. But the information cannot be independently verified at press time. A call to CBN Director of Communications was not answered.

Standard Chartered Bank had in email to customers to this effect, stressed that their naira debit cards will no longer be used for international transactions, from January 1, 2016. It attributed the decision to limited foreign exchange supply in the market.

It said the action, remains a temporary measure that will be reversed when the forex supply improves.

Equally, Diamond Bank emailed its customers, specifying countries where their cards are acceptable. “Due to the current forex market realities, please be informed that your naira debit card has been restricted for usage in United Arab Emirates, China and African countries.  We encourage you to make use of the Diamond USD Dollar or Diamond GBP debit card to transact in any of the above mentioned countries,” it said.

The bank also promised its customers unlimited annual spend from their dollar and Pounds Sterling accounts; increased daily spend limit across all channels like web, Point of Sale (POS) terminals, Automated Teller Machines (ATMs) among others.

Such spends, it said, will not attract conversion fee on transactions done in card’s denominated currency and also chip and PIN protection.

Analysts said the policy shift is part of government’s effort to stem the flow of foreign exchange out of the country.  In June, the CBN banned businesses from accessing hard currency to import about 40 items. The list included Indian incense, plastic and rubber products, soap and even private jets. The amount that Nigerians could spend on credit cards abroad has already been reduced by the banks.

The fall in crude oil prices has reduced Nigeria’s dollar earnings, making it difficult for the CBN to fund imports. The Nigeria’s crude oil – bonny light, which traded at $110.2 per barrel in January 2014, reaching $114.6 per barrel by June of the same year, now trades below $37 per barrel on December 15.

Boxed to a corner with the continued slide in reserves and crude oil prices, the CBN is thinking of ways out of the quagmire. One of the steps taken by the apex bank was tinker with its forex policies to conserve the reserves.

In June, it banned importers of 41 items including toothpicks, private jets and rice and other items classified as finished products from accessing the official forex markets to fund their imports.

Before then, it banned the sale of forex by banks to importers without the requisite shipping documents and directed that only imports, which are backed with evidence of shipment and other relevant documents, will qualify for purchase of forex at official rate among other restcitions..