Dollar scarcity: Banks cut customers’ card spending abroad

Nigerian banks are fast running out of dollars to continue settling their foreign counterpart banks who undertake payments for transactions done overseas by Nigerian naira debit and credit cardholders.

As a result of the development, some banks have imposed daily limits on the amount of money (in dollars) naira debit and credit cardholders can spend overseas via Point of Sale terminals and online transactions.

Top bank officials, who spoke to our correspondent on the condition of anonymity because they were not authorised to speak on the matter, said the limit became necessary to save the banks from the embarrassment of not having funds to settle their counterpart banks for the overseas card transactions in time.

An official of a tier-1 bank said, “We (banks) are having challenges in sourcing for dollars to maintain and settle international card transactions abroad. In other to save ourselves, we needed to impose daily limits on the amount naira debit and credit cardholders spend overseas. It is helping us to reduce the amount we pay to our foreign banks.

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“Before now, we have various sources of sourcing dollars to settle these overseas card transactions. These include the Central Bank of Nigeria and oil companies, who often sell dollars to banks.”

The official, however, said that since the oil prices started falling, leading to the depletion of the dollars in the external reserves, banks had been finding it difficult to raise enough dollars to settle the transactions done on naira debit and credit cards abroad.

Investigations by our correspondent revealed that many banks had imposed daily limits ranging from about (N60,000) $300 to N100,000 ($500) for abroad or international Point of Sale terminals and online/web transactions.

This is a drastic reduction from the N1.5m ($7,500) and N750,000 ($3750) daily limits stipulated by the Central Bank of Nigeria for international/abroad PoS and web transactions, respectively.

The reduction is said to be disrupting the shopping and spending patterns of Nigerians and other nationals of whom most are on summer vacation and are currently using their naira debit and credit cards overseas.

Some bank customers currently abroad, especially in the United States and the United Kingdom, are already having some of their PoS terminal transactions declined owing to the daily limits.

Also, some customers in the country who are trying to make some online purchases in dollars have been unable to complete some of the transactions as a result of the limits imposed by the banks.

Guaranty Trust Bank Plc, however, informed its customers of the difficulty in sourcing dollars to fund its overseas card transactions and the decision to impose a daily limit of $300 (N60,000) for PoS and online transactions.

The bank, in an email to its customers over a week ago, had said, “In view of the increased difficulty in sourcing foreign currency to settle international transactions on Naira MasterCards, we have reduced the daily international spending limit on your Naira MasterCard to $300.

“This means that you can only spend up to $300 daily when using your GTBank Naira MasterCard for international payments via PoS and online.

“Kindly accept our sincere apologies for every inconvenience this might cause, and we would like to assure you that we are working hard at finding alternative sources for foreign currency and a quick respite to this situation.”

The bank said it was temporary measure towards satisfying a larger customer base.

However, the bank later sent another email, announcing a review to the spending limits on its naira debit card.

The email read in part, “We are pleased to inform you that the temporary measure reducing the international spend limit on your Naira MasterCard has been reviewed, and we have increased the international spend limit on your Naira MasterCard to $10,000 monthly.

“This means that you can now spend up to $10,000 using your GTBank Naira MasterCard for international payments via POS and online, subject to a monthly limit of $10,000 and an annual limit of $50,000.

“In line with our commitment to ensuring that our customers are able to make payments easily and conveniently, we will continue to update you on every development regarding international spend limit on your Naira MasterCard.”