The Central Bank of Nigeria (CBN) has introduced new security requirements for foreign card transactions in Nigeria, directing banks and other financial institutions to implement multi-factor authentication for daily foreign card spending above $200. The move is aimed at strengthening transaction security while improving the reliability and user experience of foreign-issued payment cards across the country.
The directive was communicated through a circular dated December 18, 2025, issued by the apex bank’s Financial Policy and Regulation Department and signed by its Director, Rita I. Sike. The circular, addressed to all deposit money banks and non-bank financial institutions, is titled “Facilitation of Seamless Use of Foreign Cards.”
According to the CBN, the new requirement applies to all foreign card withdrawals and online transactions that exceed $200 per day, $500 per week, and $1,000 per month, or their naira equivalents. The measure is designed to strike a balance between enhanced security and improved convenience for tourists, business travellers, and Nigerians returning from the diaspora who rely on foreign-issued cards for payments.
Strengthening security while improving access
In the circular, the CBN stated that all affected transactions must be protected with multi-factor authentication, which may include a combination of PINs, one-time passwords, biometrics, or device-based verification. The regulator said the step is part of broader efforts to reduce fraud, enhance consumer confidence, and ensure the seamless acceptance of international cards across Nigeria’s payment ecosystem.
Beyond authentication, the CBN directed banks and non-bank acquirers to ensure uninterrupted access to local currency withdrawals, payments, and transfers for users of foreign cards nationwide. Financial institutions were instructed to maintain high system availability so that transactions are processed efficiently across automated teller machines (ATMs), point-of-sale (POS) terminals, and online or web-based payment platforms.
The apex bank also emphasised that all payment terminals must be properly configured to accept international cards routed through Nigerian acquirers. In addition, terminals are required to comply fully with global card association standards and hold the necessary certifications or recertifications to support smooth transaction processing.
Exchange rate transparency and settlement rules
The CBN placed strong emphasis on pricing transparency and settlement discipline. Banks and acquirers are required to clearly disclose applicable exchange rates to customers before completing foreign card transactions.
According to the circular, exchange rates must be market-driven and aligned with the prevailing official rate, with all fees and charges disclosed upfront. Transactions are to be completed only after customers explicitly accept the stated terms, and institutions must retain evidence of such acceptance.
In line with existing foreign exchange regulations, all merchant settlements arising from foreign card transactions are to be made strictly in naira. Financial institutions are also required to maintain sufficient liquidity to meet settlement obligations as and when due.
Fraud monitoring, AML, and consumer protection
To curb fraud and illicit financial activity, the CBN directed financial institutions to deploy robust transaction-monitoring systems capable of detecting unusual or suspicious usage patterns involving foreign cards across all payment channels.
Merchants that process foreign card payments are expected to comply with strengthened know-your-customer and anti-money laundering controls. Where transactions appear suspicious, merchants must request valid identification and ensure that card-present receipts are properly signed.
All suspicious transactions are to be promptly reported to the Nigeria Financial Intelligence Unit, in line with existing anti-money laundering and counter-terrorism financing regulations.
At the same time, the CBN instructed institutions to recalibrate their fraud-monitoring systems to reduce false declines on legitimate foreign card transactions. This, the bank said, would improve the overall experience for visitors and returning Nigerians. For low-value transactions, card acceptance devices are also required to support contactless payment options.
Chargebacks, disputes, and compliance
The circular further imposed stricter obligations on acquirers regarding dispute resolution and chargeback management. Institutions are required to maintain robust, auditable processes that align with card scheme rules and CBN guidelines, covering timely case intake, evidence collation, refunds, and post-incident reviews.
Transaction records—including approval slips, signed receipts, and item or service descriptions—must be retained for a minimum of 12 months and made available within 24 hours upon request. Acquirers are also mandated to conduct quarterly training for merchants and agent networks on dispute handling and chargeback procedures.
The CBN warned that unresolved consumer complaints related to foreign card transactions, particularly those escalated to the regulator, would attract appropriate sanctions. Tourists and Nigerians returning from abroad who encounter difficulties using foreign-issued cards were advised to report such incidents to the CBN’s Consumer Protection and Financial Inclusion Department.
The regulator said it would closely monitor compliance with the directive and impose penalties on any institution found to be in breach, underscoring its commitment to a secure, transparent, and globally compatible payment environment.
Emmanuel Bassey is a Financial Expert that has worked in the Banking and Finance Industry for over 15+ years across different banks in Nigeria
