Standard Chartered Bank, one of Nigeria’s leading commercial banks, today announced to its customers that it will suspend the use of its Naira debit card internationally from August 1, 2022.
This follows a successive reduction in debit card limits on international spending by other major Nigerian banks earlier this year.
The bank communicated this by letter signed by its manager of deposits, debit card and mortgages. She therefore called on her clients to seek alternative means of settling their expenses abroad.
What they said:
“Please note that effective August 1, 2022, international spending on our Visa Naira debit card will be suspended.” He however reiterated that the limit on the bank’s credit card remains the same. “The international spending limit on our bank credit card, however, remains at $1,000 per month and foreign currency debit card limits remain unchanged.”
Also Read: All You Need to Know About CBN’s Open Banking Directive for Fintechs and Banks
what we think
The decision to suspend the use of their debit cards internationally is perhaps no exaggeration given the scarcity of currencies. There had been reports that many banks had, in the first quarter of the year, reduced their monthly international spending limit on Naira cards.
Nigerians at home and abroad have not found it easy to pay for services with their debit cards since the first wave of restrictions imposed by the Nigerian financial regulator due to the pandemic in 2020.
This situation has been aggravated by deteriorating exchange rate conditions and CBN restrictions on the disbursement of foreign exchange to commercial banks.
The United Bank for Africa (UBA) was the first to make the decision on February 24, when it announced that its new $24 limit would come into effect on March 1, 2022. In March, other banks like Zenith and First bank have followed suit. reducing their spending limits to $20 and $50 respectively, with banks citing currency scarcity.
Since then, Guaranty Trust Bank (GTB), Sterling Bank and Union Bank have also reduced their limit from what existed before to a new normal, to the detriment of their customers. In the case of Wema Bank, it was a total suspension of their cross-border payments on March 14.
This new wave could actually worsen the situation for Nigerians who constantly travel outside the shores of this country and carry out many transactions using their Naira debit cards.
New and bigger challenges
This new development of Standard Chartered Bank would no doubt pose new challenges for Nigerians, given that the bank is one of the largest banks both domestically and beyond the country’s shores.
Nigerians would probably struggle to pay for so many things including paying for online courses on platforms providing these services, physical and online purchases abroad, paying for streaming platforms and many other limitations .
With the apex bank of Nigeria, the Central Bank of Nigeria has halted the sale of foreign exchange to BDCs and also stated that it will stop the sale of foreign exchange to depository banks (DMBs) by the end of 2022, Nigerians could simply prepare for a reduction in banking. and financial transactions outside the country’s shores.
No doubt businesses will suffer when the forex is unavailable by banks and other institutions. It would also significantly reduce the number of trips, as well as health and education tourism.
We recently reported that the struggles of Flutterwave and other African fintechs with shutting down their virtual dollar card may not be unrelated to the shutdown of Union54.
If you would like to be featured in our Entrepreneur Spotlight, click here to share your startup story with us.