The Central Bank of Nigeria has unveiled a sweeping directive designed to fundamentally reshape the landscape for foreign-issued payment cards, ushering in a new era of enhanced security and operational efficiency for international transactions within the country. Issued via a circular dated December 18, 2025, this comprehensive policy framework targets all banks and non-bank financial institutions, mandating a series of technical, operational, and compliance upgrades. The initiative aims to create a more secure and seamless financial environment, directly benefiting international visitors and Nigerians living abroad who utilize their foreign cards for payments and withdrawals. This move is seen as a critical step in modernizing Nigeria’s payment infrastructure to align with global standards, fostering greater confidence in the financial system and encouraging foreign currency inflows through legitimate channels. The directive represents a proactive effort to address long-standing challenges related to fraud, service disruptions, and inconsistent user experiences that have occasionally hampered foreign card usage.
Fortifying Transactions with Advanced Security Protocols
The cornerstone of the new regulations is the mandatory implementation of multi-factor authentication (MFA) for certain transactions. This heightened security measure is not a blanket requirement but is strategically applied to transactions that pose a higher risk. Specifically, MFA will be triggered for any withdrawals or online payments made with a foreign-issued card that exceed specific thresholds: $200 per day, $500 per week, or $1,000 per month, or their naira equivalents. By introducing an additional layer of verification for these higher-value transactions, the CBN aims to significantly curtail fraudulent activities, such as card-not-present fraud and unauthorized withdrawals. This targeted approach is designed to strike a balance between robust security and user convenience, ensuring that smaller, everyday purchases can proceed with minimal friction while larger transactions receive the scrutiny they require. The ultimate goal is to build a more resilient payment ecosystem where both cardholders and merchants can transact with greater confidence.
Beyond the headline MFA requirement, the CBN’s directive delves deep into the operational responsibilities of financial institutions, mandating a broad overhaul to guarantee the widespread acceptance and reliability of foreign cards. Banks and acquiring institutions are now under strict instruction to ensure uninterrupted access to local currency for international cardholders, which involves maintaining high system availability to prevent frustrating service disruptions during withdrawals or payments. A key part of this is the proper configuration of all payment acceptance points, including automated teller machines (ATMs), point-of-sale (POS) terminals, and online payment gateways. These systems must be set up to seamlessly process international cards routed through Nigerian acquirers and must also carry the necessary certifications to comply with global card association standards. To further elevate the user experience, the directive champions modern payment methods by requiring that all card acceptance devices support contactless payment options, especially for low-value transactions, and that sophisticated fraud-monitoring systems are finely tuned to reduce the incidence of false declines on legitimate purchases.
Ensuring Seamless Operations and Financial Integrity
The new regulations also establish rigorous rules governing financial settlement and the prevention of illicit activities, ensuring the integrity of the entire transaction lifecycle. A critical stipulation is that all payments to merchants arising from foreign card transactions must be settled exclusively in Nigerian naira. This measure standardizes the settlement process and helps maintain stability within the local currency market. To support this, financial institutions are required to maintain sufficient liquidity at all times to meet their settlement obligations promptly, preventing delays that could disrupt merchant operations. On the anti-fraud front, institutions must now deploy advanced transaction monitoring systems. These systems are expected to be capable of identifying and flagging unusual usage patterns in real-time, providing an early warning against potential financial crime. Furthermore, the directive tightens the screws on merchant oversight, mandating stricter Know-Your-Customer (KYC) and Anti-Money Laundering (AML) checks. Merchants are now explicitly obligated to report any suspicious transactions they encounter directly to the Nigerian Financial Intelligence Unit (NFIU), making them an active part of the nation’s financial crime prevention framework.
Consumer protection and transparency are central pillars of the CBN’s comprehensive directive, aimed at building trust and empowering international cardholders. The circular mandates that financial institutions must provide clear, upfront disclosure of all applicable, market-driven exchange rates and any associated charges before a transaction is completed. This ensures that customers are fully aware of the total cost of their transaction in their home currency. Crucially, a transaction can only proceed after the customer has explicitly accepted these terms, and financial institutions are required to retain auditable proof of this acceptance. This prevents hidden fees and promotes a more transparent pricing model. To address post-transaction issues, the directive strengthens dispute resolution processes. Acquirers must establish and maintain robust, auditable chargeback management systems and are now required to conduct quarterly training for their merchant networks on proper dispute handling. The CBN has underscored the seriousness of these consumer protection measures by warning that any consumer complaints not resolved within officially approved timelines will result in sanctions against the responsible institution.
A New Era of Accountability and Data Management
The directive culminated in the establishment of stringent data management and record-keeping obligations, cementing a new foundation of accountability for the entire financial ecosystem. Under the new rules, institutions were required to retain detailed transaction records, including terminal approval slips and signed merchant receipts, for a minimum period of 12 months. This provision ensured that a clear and verifiable audit trail existed for every transaction, facilitating easier dispute resolution and regulatory oversight. Moreover, the regulations stipulated that these records had to be produced within a tight 24-hour window upon request from the CBN, demonstrating a commitment to swift and effective supervision. By mandating these rigorous data retention and access protocols, the Central Bank effectively created a framework where compliance could be actively monitored and enforced. This final piece of the directive solidified the shift towards a more transparent, secure, and reliable environment for foreign card transactions, concluding a significant chapter in the modernization of Nigeria’s payment systems.
