The Central Bank of Nigeria (CBN) has directed
banks and other financial institutions to enforce multi-factor
authentication (MFA) on foreign-issued card transactions carried out within
the country, in a move aimed at boosting security, confidence and ease of
payments.
The directive was issued in a circular dated December
18, 2025, signed by Dr Rita I. Sike, Director of the CBN’s Financial
Policy and Regulation Department. Titled “Facilitation of Seamless Use of
Foreign Cards,” the circular applies to all withdrawals and online
transactions exceeding $200 daily, $500 weekly and $1,000 monthly, or
their naira equivalents.
According to the apex bank, the policy is designed to
strengthen transaction security while improving the experience of tourists
and Nigerians returning from the diaspora who rely on foreign-issued cards
for payments.
The CBN instructed banks and non-bank financial
institutions to implement multi-factor authentication for all qualifying
foreign card transactions and ensure uninterrupted access to cash
withdrawals, payments and transfers nationwide.
“All ATMs, point-of-sale terminals, and virtual or
web-based payment platforms must be properly configured to accept international
cards routed through Nigerian acquirers,” the regulator said, adding that all
terminals must comply with global card association standards and hold
valid certifications.
The apex bank further directed that all settlements
from foreign card transactions be made strictly in naira, with financial
institutions required to maintain sufficient liquidity to meet settlement
obligations.
To curb fraud, banks and card acquirers were ordered
to deploy robust transaction-monitoring systems capable of detecting
unusual usage patterns involving foreign cards. Merchants handling such
transactions must comply with enhanced know-your-customer (KYC) and
anti-money laundering (AML) requirements.
Where transactions appear suspicious, merchants are
expected to request valid identification, ensure card-present receipts are
properly signed, and promptly report such cases to the Nigerian Financial
Intelligence Unit (NFIU).
On pricing transparency, the CBN stressed that
customers must be clearly informed of applicable exchange rates before
transactions are completed. Exchange rates must be market-driven, based on the
prevailing official rate, with all charges disclosed upfront.
“Transactions are to be completed only after users
have explicitly accepted the terms, with evidence of such acceptance retained,”
the circular stated.
The regulator also directed acquirers to conduct quarterly
training for merchants and agent networks on dispute resolution and
chargeback handling. Consumer complaints must be resolved within approved
timelines, warning that unresolved cases escalated to the CBN would attract appropriate
sanctions.
Tourists and Nigerians returning from abroad who
experience challenges using foreign-issued cards were advised to report such
issues to the CBN’s Consumer Protection and Financial Inclusion Department.
To further improve user experience, banks were
instructed to recalibrate fraud-monitoring systems to reduce false declines
on legitimate transactions, while enabling contactless payments for
low-value transactions.
The circular also introduced stricter requirements for
dispute resolution and chargebacks, mandating auditable processes
covering case intake, evidence collation, refunds and post-incident analysis.
Transaction records must be retained for at least 12 months and made
available within 24 hours upon request.
The CBN said the measures form part of broader efforts
to enhance security, convenience and trust in foreign card usage across
Nigeria.
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