Two commercial banks in Nigeria have announced the resumption of international transactions on their naira cards.
In separate announcements to customers, United Bank of Africa (UBA) and Wema Bank said the service has recommenced on their naira cards.
The development comes about three years after many banks suspended international transactions on naira debit cards.
In a recent notice to customers, the UBA said the resumption aligns with its continued commitment to providing clients with seamless and enhanced banking experiences.
“In line with our continued commitment to providing you with seamless and enhanced banking experiences, we are pleased to inform you that all UBA Premium Naira Cards, including Gold, Platinum, and World variants are now enabled for international transactions,” the statement reads.
“This means you can now use your Premium Naira Card for everyday payments, online shopping, POS, and ATM transactions across the world, with more ease and flexibility.
“If you haven’t used your card recently, now’s a great time to rediscover the convenience and prestige that comes with being a UBA premium cardholder.”
Also announcing the development in a recent statement, Wema Bank said customers can now “pay in dollars” with their naira cards.
“Your Wema Naira Mastercard just went global! Now you can pay in dollars on all your favourite international platforms; Amazon, eBay, AliExpress? Netflix, Spotify, YouTube,” the bank said.
WHY BANKS ARE MAKING THE SHIFT
Ayokunle Olubunmi, head of financial institutions ratings at Agusto & Co, said the improved liquidity in the foreign exchange (FX) market supported banks’ decision to reactivate their naira crads for global transactions.
“The moderating premium on the parallel market transactions and the reduced arbitrage opportunities is also responsible for the decision,” he said.
Also speaking with TheCable, Charles Sanni, the chief executive officer (CEO) of Cowry Treasurers, said the spread or margin between official and parallel market rates, which have thinned out, may have influenced the decision by the banks.
He said the interest rate is very high in Nigeria, hence minimising borrowing money to speculate on foreign exchange.
“The naira has also continued to appreciate against the other major currencies of the world. More so, there has been increased diaspora remittances based on the new policy of the Central Bank of Nigeria (CBN) on opening of accounts for non-residents, particularly Nigerians in diaspora,” he said.
Sanni also cited the restored confidence in FX management by the federal government and the CBN, following the ease of transferring funds and capital repatriation.
The CEO said there has been an improved credit rating of Nigeria, clearance of the FX backlogs, “new trading platform, increase in oil prices from geopolitical conflicts, and banks capitalisation”.
Between July 2022 and January 2023, several other banks also temporarily suspended international transactions on ATMs and POS channels.
The shift was a result of the chronic FX scarcity, which threatened the survival of key sectors of the economy.
In July, Standard Chartered Bank suspended international transactions on its naira visa debit card.
First Bank of Nigeria (FBN), on September 21, 2022, said it will suspend international transactions on its naira Mastercard.
Three months later, Guaranty Trust Bank (GTBank) stopped global payments on its naira Mastercard, with Zenith Bank joining the fray on January 9, 2023.
Flutterwave, Eversend, and other financial technology platforms also made similar moves, suspending their virtual card services for international transactions.
(The Cable)
