How CBN Is Expanding Banking Security, Efficiency On International Card Transactions

The Central Bank of Nigeria (CBN) recently directed banks and non-bank acquirers to implement multi-factor authentication for foreign card transactions. The move is to strengthen security and improve user experience for international cardholders in the country. The measures are further geared at ensuring uninterrupted and efficient local currency withdrawals, payments, and transfer services for users of foreign-issued payment cards across Nigeria, particularly tourists and Nigerians in the diaspora visiting the country.

With improvement in foreign capital inflows comes expansionary policies by the Central Bank of Nigeria (CBN) that allow card transactions domestically and abroad.

Foreign capital inflows reached $20.98bn in the first 10 months of 2025, a 70 per cent increase over total inflows for 2024 and a 428 per cent surge compared to the $3.9bn recorded in 2023, reflecting a clear resurgence in investor confidence.

It all started with local banks lifting restrictions on card transactions abroad by resuming domestic card use abroad.

For instance, three Tier-1 banks and a mid-tier bank, United Bank for Africa (UBA) Plc, FirstBank, GTBank and Wema Bank Plc respectively, all announced the resumption of international transactions on their naira debit cards. For the banks, the resumption aligns with its continued commitment to providing clients with seamless and enhanced banking experiences.

While customers are celebrating this milestone, the CBN has also directed banks and non-bank acquirers to implement multi-factor authentication that allows foreign cards use domestically.

The regulator said the new framework is designed to improve access to funds, enhance transaction security, and boost overall user experience for foreign cardholders.

CBN’s Director of Financial Policy and Regulation, Rita Sike further instructed financial institutions to apply the same authentication requirements for $200 transactions, to transactions above $500 per week and $1,000 per month, and to ensure that point-of-sale (POS) terminals are properly configured for the use of foreign-issued cards.

In addition, banks and non-bank acquirers were directed to configure all automated teller machines (ATMs), POS, and virtual terminals to accept international cards through Nigerian acquirers, comply fully with card association standards, and obtain the necessary certifications to enable seamless transaction processing. Institutions were also instructed to maintain high system availability to guarantee uninterrupted transaction processing.

The circular reads, “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 reads.

“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 valid identity documents where a transaction appears suspicious.”

In addition, banks and non-bank acquirers were asked to report suspicious transactions to the Nigeria Financial Intelligence Unit (NFIU) and recalibrate fraud-monitoring systems to reduce false declines on legitimate transactions.

Understanding reforms impact on economy

Central Bank of Nigeria (CBN) Governor, Olayemi Cardoso explained that Nigeria’s external sector strengthened decisively in 2025, with the current account balance rising over 85 per cent to $5.28bn in Q2, up from $2.85bn in Q1.

Bolstering our external buffers, foreign reserves reached $46.7bn by mid-November, the highest in nearly seven years, providing over 10 months of forward import cover and significantly enhancing the economy’s resilience.

Also, President, Association of Bureaux De Change Operators of Nigeria (ABCON) , Dr. Aminu Gwadabe, said the reforms instituted by the CBN in the FX market continue to yield the desired results, one of which is the reactivation of international transactions on their naira-denominated debit cards, which is bringing great benefits to travelers and businesses.

Clearly, before the Cardoso-led management team of the Central Bank of Nigeria (CBN) assumed office in October 2023, one of the biggest challenges that the country’s economy was grappling with was forex scarcity.

To deal with the challenge, businesses and travelers had to resort to the parallel FX market to source for funds, a situation which allowed FX speculation to thrive. Thus, one of the first key major steps that the CBN, led by its Governor, Cardoso, took in 2023, was to embark on a series of bold reforms to attract more foreign capital to the economy, achieve price and exchange rate stability.

Specifically, the apex bank liberalized the foreign exchange market, stopped central bank financing of the fiscal deficit, resulting in increased investor confidence in the Nigerian economy and allowing the country to successfully return to international capital markets last December and being upgraded by rating agencies.

Also, the implementation of the reforms has significantly boosted the nation’s FX reserves as well as liquidity in the Fx market. Banks resume use of naira debit cards for international transactions Indeed, reflecting the rising dollar liquidity, Nigerian banks recently started lifting the over three-year moratorium on the use of naira-funded debit cards abroad.

For instance, three Tier-1 banks and a mid-tier bank, United Bank for Africa (UBA) Plc, FirstBank, GTBank and Wema Bank Plc respectively, have announced the resumption of international transactions on their naira debit cards. Thus, in a notice to customers, UBA said the resumption aligns with its continued commitment to providing clients with seamless and enhanced banking experiences.

“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,” the bank said.

“This means you can now use your Premium Naira Card for everyday 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.

Also in a recent statement, Wema Bank said customers can now “pay in dollars” with 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.

Commenting on the development in a report, Head of financial institutions ratings at Agusto & Co, Ayokunle Olubunmi, said the improved liquidity in the FX market supported banks’ decision to reactivate their naira cards for global transactions. “The moderating premium on the parallel market transactions and the reduced arbitrage opportunities is also responsible for the decision,” he said.

Analysts said that by allowing travelers and owners of businesses use their naira-cards abroad, the banks are making it easy for cardholders to pay their hotel bills, make reservations and carry out other transactions using their naira debit cards.

Surge in forex inflow Further highlighting the rising dollar liquidity, an analysis of FX inflows in the last few months showed that Nigeria attracted $5.96bn monthly inflows from May 2025 till date. Industry reports indicate that Nigeria’s foreign exchange market witnessed a significant boost in May, with total inflows rising by 62.0 per cent month-on-month (M-o-M) to $5.96bn, driven largely by increased participation from domestic and foreign investors.

This marked one of the highest inflow levels in recent months and signals improving market sentiment amid macroeconomic reforms and a relatively stable naira.

Diaspora remittances to Nigeria, estimated at $23bn annually, remain a reliable source of forex to the domestic economy

In an emailed note to investors, analysts at Financial Derivatives Company Limited (FDC) attributed rising FX inflows to a surge in oil prices and multiple inflow channels created by the CBN. Particularly, the apex bank, has in recent months, activated multiple FX sources to increase dollar inflows, boost dollar access to manufacturers and retail end users and support naira recovery across markets.

From measures to improve diaspora remittances through new product development, the granting of licenses to new International Money Transfer Operators (IMTOs), implementing a willing buyer-willing seller FX model, and enabling timely access to naira liquidity for IMTOs, the CBN has simplified dollari nflow channels for authorized dealers and other players in the value chain.

FX Reserve Accretion

The rising forex liquidity has equally impacted positively on the country’s dollar buffers as Cardoso, recently, announced a quantum leap in the Net FX Reserve (NFER) position at $23.11bn at the end of last year. According to the apex bank data, NFER stood at $23.11bn, the highest level in over three years, a marked increase from $3.99bn at year-end 2023, $8.19bn in 2022, and $14.59bn in 2021.

The NFER, which adjusts gross reserves to account for near-term liabilities such as FX swaps and forward contracts, is widely regarded as a more accurate indicator of the foreign exchange buffers available to meet immediate external obligations. According to Cardoso, the increase in reserves reflects a combination of strategic measures undertaken by the CBN, including a deliberate and substantial reduction in short-term foreign exchange liabilities – notably swaps and forward obligations.

He noted that the strengthening was also occasioned by policy actions to rebuild confidence in the FX market and increase reserve buffers, along with recent improved foreign exchange inflows – particularly from non-oil sources. The result is a stronger and more transparent reserves position that better equips Nigeria to withstand external shocks.

The expansion occurred even as the CBN continues to reduce short-term liabilities, thereby improving the overall quality of the reserve position. “This improvement in our net reserves is not accidental; it is the outcome of deliberate policy choices aimed at rebuilding confidence, reducing vulnerabilities, and laying the foundation for long-term stability,” Cardoso stated, adding: “We remain focused on sustaining this progress through transparency, discipline, and market-driven reforms.”

In fact, findings show that the reserves have continued to strengthen in 2025. While the first quarter figures reflected some seasonal and transitional adjustments, including significant interest payments on foreign-denominated debt, underlying fundamentals remain intact.

Also, analysts expect the reserves to continue improving over the second quarter of this year. With foreign capital inflows into the domestic economy being key elements in the drive to achieve monetary and fiscal policy stability, the CBN has said that it is cultivating more sources of FX to increase dollar inflows, boost access to manufacturers and retail end users.

Analysts said the Management of the CBN, under the leadership of Cardoso, is committed to stimulating productivity and financial inclusiveness as well as delivering on its core mandate of monetary and price stability.

This has resulted in significant increase of inflow in foreign investments, positive trade balances and quantum leap in financial inclusion rate in recent times.