The Central Bank of Nigeria (CBN) has directed banks and other financial institutions to implement multi-factor authentication for foreign card transactions exceeding $200 per day as part of new measures to improve the seamless use and security of foreign-issued payment cards in Nigeria.
Experts say Multi-Factor Authentication (MFA) is a security method requiring two or more verification types (factors) to confirm identity before granting access to an account, making it much harder for hackers to break in, even if they steal your password
The directive was issued in a circular dated December 18 by the CBN’s Financial Policy and Regulation Department and signed by its Director, Dr Rita I. Sike. Titled “Facilitation of Seamless Use of Foreign Cards”, the circular applies to all banks and non-bank financial institutions operating in the country.
According to the apex bank, the authentication requirement covers all withdrawals and online transactions above $200 daily, $500 weekly, and $1,000 monthly, or their naira equivalents. The policy is aimed at strengthening transaction security while enhancing the payment experience of tourists and Nigerians returning from the diaspora.
The CBN said the initiative forms part of broader efforts to improve convenience, security, and user experience in foreign card usage across Nigeria.
Under the new guidelines, financial institutions are required to ensure uninterrupted and efficient local-currency withdrawals, payments, and transfers for users of foreign-issued cards nationwide. Banks and non-bank acquirers must also maintain high system availability to guarantee seamless transaction processing.
All automated teller machines (ATMs), point-of-sale (PoS) terminals, and virtual or web-based payment platforms are to be properly configured to accept international cards routed through Nigerian acquirers. The regulator further mandated that these terminals comply fully with global card association standards and possess the necessary certifications or recertifications.
Exchange rate transparency
The CBN also emphasised transparency in exchange rate pricing and settlement. Banks and acquirers are required to clearly communicate applicable exchange rates and associated charges to customers before transactions are completed.
The circular stated that exchange rates for foreign card transactions must be market-driven and based on the prevailing official rate. Transactions are to be processed only after users have explicitly accepted the stated terms, with evidence of such acceptance retained.
In addition, all merchant settlements arising from foreign card transactions must be made strictly in local currency (naira), while institutions are required to maintain sufficient liquidity to meet settlement obligations.
Fraud Monitoring and Consumer Protection
To curb fraud, the CBN instructed financial institutions to deploy robust transaction-monitoring systems capable of detecting unusual usage patterns involving foreign cards across all terminals.
Merchants handling foreign card payments are to be subjected to strengthened know-your-customer (KYC) and anti-money laundering (AML) controls. Where transactions appear suspicious, merchants must request valid identification documents and ensure that card-present transaction receipts are properly signed.
Suspicious transactions are to be reported promptly to the Nigeria Financial Intelligence Unit (NFIU), in line with existing regulations. The CBN also directed institutions to recalibrate fraud-monitoring systems to minimise false declines on legitimate transactions, particularly for visitors and returning Nigerians. For low-value transactions, card acceptance devices must support contactless payment options.
Chargebacks and Sanctions
The circular introduced stricter obligations for acquirers on dispute resolution and chargebacks. Acquirers are required to maintain robust, auditable chargeback management processes aligned with card-scheme rules and CBN guidelines, including timely case intake, evidence collation, refunds, and post-incident analysis.
Transaction records—such as terminal approval slips, signed merchant receipts, and item or service descriptions—must be retained for at least 12 months and be retrievable within 24 hours upon request. Acquirers are also required to provide quarterly training for merchants and agent networks on dispute handling and chargeback processes.
The CBN warned that consumer complaints arising from foreign card transactions must be resolved within approved timelines, noting that escalations to the central bank would attract sanctions. Tourists and Nigerians returning from the diaspora who experience 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 will closely monitor compliance and impose appropriate sanctions on any institution found to be in breach of the directive, in line with existing regulations.
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