The Central Bank of Nigeria (CBN) has introduced a new directive mandating Multi-Factor Authentication (MFA) for foreign-issued card transactions that exceed defined spending thresholds, as part of efforts to strengthen transaction security while improving the payment experience for international visitors.
The directive, issued via a circular dated December 18, 2025, and signed by Dr. Rita I. Sike, Director of the Financial Policy and Regulation Department, targets the growing risks associated with cross-border electronic fraud. At the same time, it seeks to address persistent challenges faced by tourists and Nigerians in the diaspora when using international payment cards within Nigeria.
New Spending Thresholds for Foreign Cards
Under the new rules, all deposit money banks and non-bank acquirers must activate additional authentication layers—such as One-Time Passwords (OTPs), biometric verification, or hardware tokens—once transactions reach the following limits:
- Daily: $200
- Weekly: $500
- Monthly: $1,000
The CBN clarified that these requirements apply to both physical point-of-sale (POS) terminals and online card-not-present transactions.
Improving the Experience for Tourists and the Diaspora
Beyond fraud prevention, the policy—titled “Facilitation of Seamless Use of Foreign Cards”—is aimed at resolving long-standing complaints around declined transactions. International visitors have often reported “false declines,” where legitimate card payments were blocked due to overly aggressive fraud filters.
To address this, the CBN has instructed financial institutions to recalibrate their fraud detection systems to reduce unnecessary transaction rejections. Banks are also required to ensure that all POS terminals support contactless (NFC) payments, particularly for low-value transactions, to speed up checkout processes. In addition, institutions must maintain high system uptime to prevent service disruptions across ATMs, POS terminals, and online payment channels.
According to the circular, the initiative is designed to “expand access to funds, strengthen transaction security, and improve user experience for tourists and Nigerians in the diaspora visiting the country.”
Mandatory Transparency on Exchange Rates and Fees
A major consumer-focused element of the directive is the requirement for full transparency on exchange rates and charges. Banks must now clearly disclose the applicable exchange rate—described by the CBN as market-driven and aligned with the prevailing official rate—before a transaction is completed.
All associated fees must also be communicated upfront, and customers must explicitly consent before transactions are processed. Financial institutions are required to retain proof of this consent for a minimum of 12 months.
Tighter Oversight of Banks and Merchants
The directive also strengthens back-end controls across Nigeria’s payment ecosystem. Banks and acquirers are now required to settle all foreign card transactions in naira, regardless of the card’s origin. They must implement advanced monitoring tools to detect unusual transaction patterns across terminals and enforce stricter Know-Your-Customer (KYC) and Anti-Money Laundering (AML) checks, especially for merchants handling high volumes of foreign card payments.
Consumer complaints must be resolved within approved timelines, with unresolved cases escalated to the CBN attracting significant penalties.
Balancing Security and Convenience
Industry observers note that the $200 daily threshold appears designed to balance security with convenience. Routine purchases—such as meals, transport, and retail spending—can proceed with minimal friction, while higher-value transactions trigger extra safeguards to prevent account compromise.
Suspicious transactions will be reported to the Nigeria Financial Intelligence Unit (NFIU), and merchants are now required to request valid identification where high-value transactions raise red flags.
Economic Implications
As Nigeria prepares for increased international arrivals, particularly during peak travel periods, the policy is expected to boost confidence in the country’s payment infrastructure. By making foreign card usage safer and more reliable, the CBN hopes to improve retail-level foreign exchange inflows and enhance Nigeria’s attractiveness as a destination for visitors and diaspora spenders.
The apex bank has warned that compliance will be closely monitored and that institutions found in breach of the directive will face appropriate sanctions.
