StanChart to Suspend Use of Naira Debit Card for International Spending from August 1

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Standard Chartered Bank said it would suspend international spending on its debit card from August 1, 2022

The bank said so in a letter to customers signed by its head of deposits, debit cards and mortgages.

Meanwhile, the bank said the international spending limit on the bank’s credit card remains at $1,000 per month and foreign currency debit card limits remain unchanged.

What the bank says

He stated: “Please note that effective August 1, 2022, international spending on our Visa Naira debit card will be suspended.

“The international spending limit on our bank credit card remains at $1,000 per month, however, and foreign currency debit card limits remain unchanged.

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“Thank you for doing business with us. As always, we remain committed to providing you with best-in-class financial solutions.”

why it matters

This announcement is significant as Standard Chartered is one of the top three Nigerian banks that attract large foreign exchange flows.

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  • By excluding the use of naira cards for international transactions, they send a clear message that the forex situation is also affecting some of the most trusted banks.
  • It also suggests that most Nigerians looking to pay for their foreign subscriptions and other international expenses may need to start looking for alternatives.

What you should know

Nigerian banks have in recent weeks reduced their monthly international spending limit on Naira cards.

  • In February, United Bank for Africa informed its Nigerian customers that the card limit had been reduced to $20 per month from $100 per month. He added that customers can only make cash at ATMs and purchases/payments through POS terminals only locally.
  • Similarly, in March, Zenith Bank also reduced the international spending limit on its naira cards to $20, adding that it was temporarily suspending international ATM and point-of-sale (POS) transactions.

The reduction and in some cases outright restrictions on the use of debit cards is linked to the forex scarcity that has hit the Nigerian economy in recent weeks.

The central bank has drastically reduced the amount of foreign currency it makes available to banks and BDCs, preferring to focus only on selling to critical sectors.

This has exacerbated forex scarcity by effectively shifting most demand to the black market. With the exchange rate now rising almost daily, it appears to create a significant risk for banks if they remain exposed to allowing their customers to spend their debit cards in naira for international transactions.

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