Guaranty Trust Bank Plc on Thursday, December 29, 2022, sent a mail notifying its customers that their naira-denominated Mastercard would no longer be allowed for foreign transactions from December 31, 2022.
According to the bank, these cards would no longer be supported for international online and Point of Sale transactions. While the bank did not give reasons for this decision, it advised them to get dollar cards, which means they need to open dollar accounts.
The bank said, “Dear customer, we write to inform you that you will no longer be able to use your Naira Mastercard for international online and POS transactions effective 31st December 2022.
“Kindly note that you can use your GTBank dollar card for all your international spending requirements.”
With this move, GTB joined a growing list of banks that have suspended international transactions on naira-denominated cards. Standard Chartered Bank announced in July that it was suspending international transactions on its naira visa debit card.
It told its customers, “Kindly be informed that effective August 1, 2022, International spending on our Naira Visa Debit Card will be suspended.”
First Bank of Nigeria had to suspend the usage of its naira-denominated cards for foreign transactions due to the foreign exchange scarcity that the country has been grappling with.
In September, the bank said, “Due to current market realities on foreign exchange, you will no longer be able to use the Naira Mastercard, Naira Credit Card, our Virtual card, and Visa Prepaid Naira card for international transactions. This will take effect on 30 September 2022.”
Although banks gave their customers the option of dollar-denominated cards to enable them to engage in international transactions, it is a pointer that naira-denominated cards are becoming useless outside the borders of the country.
But things were not always like this. It has been a long road to where naira-denominated cards are now. Users of naira-denominated cards were formerly allowed to spend up to $150,000 per annum ($12,500 per month) for international transactions. But in April 2015, the spending limit on naira-denominated cards for international transactions was reduced to $50,000 per person per annum or $4,166.7 per month. This soon dropped to $500 per month and then $100 per month. In the first quarter of 2022, holders of naira-denominated cards were limited to $20 international transactions. And in December, they were finally barred from transacting any international transaction with their naira-denominated cards.
Nigerians have been here before. In 2016, banks also suspended international payments on naira-denominated cards. In a mail to its customers at the time, Standard Chartered Bank blamed limited foreign exchange supply for its decision to stop supporting international transactions on naira cards.
Banks are not the only ones struggling to facilitate international transactions in the country. Fintechs are in the same situation. With every rising of the sun, a new fintech springs up and promises to help Nigerians facilitate foreign transactions. But like shooting stars, they are here today and gone tomorrow.
Fintechs such as Flutterwave and several others that used to have virtual dollar cards have since suspended services that facilitate international transactions.
