In a decisive move to tighten security and improve the experience for travellers using foreign cards in Nigeria, the Central Bank of Nigeria (CBN) has instructed all banks and financial institutions operating in the country to roll out multi-factor authentication for certain international card transactions. The directive applies to daily foreign card use above $200 and forms part of a broader strategy to protect consumers, cut fraud, and enhance payment convenience nationwide.
Issued on December 18, 2025, by the Financial Policy and Regulation Department of the apex bank, the circular titled Facilitation of Seamless Use of Foreign Cards sets clear expectations for both banks and non-bank financial institutions. It was signed by Dr Rita I. Sike, Director of the department responsible for shaping the nation’s financial policy framework.
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What the New Rule by CBN Means for Cardholders
Under the latest regulation, Nigerian banks and other authorised institutions must ensure that any withdrawal or online payment using a foreign-issued card that exceeds the equivalent of $200 per day triggers a multi-factor authentication process before approval. The requirement extends to transactions worth more than $500 per week and $1,000 in a calendar month.
In practical terms, this means that a foreigner visiting Nigeria or a Nigerian returning home with a card issued outside the country will be prompted to confirm their identity through at least two verification steps before a high-value transaction is finalised. These steps could include something they know, like a password or PIN, and something they have, such as a phone one-time passcode or biometric confirmation.
The CBN has stressed that this measure is designed to safeguard users against unauthorised access and reduce the risk of fraudulent transactions. Financial institutions are required to configure all related payment channels, including ATMs, point-of-sale terminals, and online gateways, to incorporate this authentication layer.
CBN is Strengthening Transparency and Settlement Integrity
The new rules are not limited to just authentication checks. The apex bank has also emphasised the need for greater transparency in currency exchange and settlement practices for foreign card payments. According to the regulatory notice, banks must show customers the applicable exchange rate based on the prevailing official market rate before a transaction is approved and completed.
This means users will see upfront how much their transaction costs in naira terms, reducing surprises and boosting confidence in the system. Charges and other fees must be disclosed explicitly, and evidence that the user accepted those terms should be retained by the institution.
An important part of the settlement regime is that all proceeds from foreign card transactions must be paid to merchants in local currency. To ensure this works smoothly, banks and payment service providers are required to hold adequate liquidity.
Fraud Prevention and Consumer Safeguards
To curb fraud and money-laundering risks associated with foreign card use, CBN also directed banks and non-bank acquirers to upgrade their monitoring systems. These systems are expected to flag unusual card patterns and possible suspicious behaviour across all terminals.
Merchants accepting international cards must comply with enhanced know-your-customer protocols. If a transaction looks out of the ordinary, merchants may ask for valid identification, make sure that receipts are properly signed, and take other steps to confirm the legitimacy of the payment. Any suspected fraudulent case should be reported quickly to the Nigerian Financial Intelligence Unit in line with existing anti-money-laundering frameworks.
The apex bank also wants institutions to fine-tune their fraud systems so that genuine foreign card users are not wrongly declined. This is an attempt to strike a balance between strong security and a smooth consumer experience, particularly for visitors and Nigerians living overseas.
New Standards for Dispute and Chargeback Handling
Another significant section of the CBN circular relates to dispute management and the handling of chargebacks. Financial institutions that acquire foreign card payments are now obliged to build thorough and auditable chargeback processes that align with recognised card network rules and regulatory guidelines.
Under these provisions, banks and payment service operators must have mechanisms in place for the timely evaluation of disputed charges, gathering evidence, issuing refunds where appropriate, and analysing incidents to prevent future issues. Crucially, they must keep detailed transaction records for at least 12 months, ensuring documents like terminal approval slips and signed merchant receipts can be accessed if needed within 24 hours.
In support of these enhanced practices, quarterly training sessions on dispute resolution and chargeback procedures will have to be provided to merchants and agents across payment networks. This requirement is meant to build capacity in the system and minimise resolution delays that frustrate cardholders.
Penalties and Reporting Mechanisms
CBN has put in place firm expectations for banks and other institutions to respond promptly to consumer complaints tied to foreign card transactions. Firms must resolve issues within specified timeframes or face sanctions as dictated by the regulator’s enforcement framework.
To support accountability and safeguard the interests of tourists and Nigerians living abroad, the CBN has urged affected users to lodge complaints with its Consumer Protection and Financial Inclusion Department if they encounter challenges using foreign-issued cards. These reports will feed into the bank’s monitoring efforts and inform any future adjustments needed in the regulatory approach.
A Broader Shift in Payment Security and Experience
The Central Bank’s latest policy reflects a growing global trend toward strengthened digital payment safeguards. As Nigeria deepens its integration into the global financial system and encourages inbound travel and investment, authorities are moving to reassure users that the country’s payment infrastructure is secure and efficient.
By mandating multi-factor authentication and supporting it with clear settlement, transparency and consumer protection standards, the CBN is laying the groundwork for a more resilient payments ecosystem. The change could also ease some of the anxieties visitors have faced when using international cards in Nigeria, providing a more predictable and safer environment for financial transactions.
As these new measures take effect, industry watchers and users alike will be watching closely to see how smoothly banks and payment service providers integrate the changes into their systems and whether heightened security improves overall confidence in cross-border card use.
If you use a foreign card in Nigeria soon, be ready for an extra step in verifying your identity before higher-value transactions are completed. The aim is not just security but also to make your financial interactions here more reliable and transparent.
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