The Central Bank of Nigeria (CBN) has directed all deposit money banks and other financial institutions to enforce multi-factor authentication on foreign-issued card transactions, as part of new measures aimed at strengthening payment security and improving user experience across the country.
The directive, contained in a circular dated December 18, 2025, was issued by the apex bank’s Financial Policy and Regulation Department and signed by its Director, Dr. Rita I. Sike.
The directive I applied to all withdrawals and online transactions conducted with foreign cards that exceed daily, weekly, and monthly spending thresholds.
Under the new framework, banks and non-bank financial institutions are required to apply multi-factor authentication to all foreign card withdrawals and online transactions above $200 per day, $500 per week, and $1,000 per month, or their equivalent in naira.
The CBN said the measure is intended to enhance transaction security while ensuring smoother payment experiences for tourists and Nigerians returning from the diaspora.
According to the circular, the policy is part of broader efforts to facilitate the seamless use of foreign-issued cards in Nigeria, improve confidence in the payment system, and reduce fraud risks associated with cross-border card usage.
Beyond authentication requirements, the CBN instructed financial institutions to guarantee uninterrupted access to local currency withdrawals, payments, and transfers for users of foreign cards nationwide.
Banks and payment service providers are expected to maintain high system availability to ensure efficient transaction processing at all times.
The regulator also directed that all automated teller machines (ATMs), point-of-sale (PoS) terminals, and online or web-based payment platforms must be properly configured to accept international cards routed through Nigerian acquirers.
These systems are required to comply fully with global card association standards and possess the necessary certifications or recertifications to support reliable transaction processing.
In addition, the CBN mandated that all merchant settlements arising from foreign card transactions must be carried out strictly in naira.
Financial institutions are also expected to maintain sufficient liquidity to meet settlement obligations as they fall due.
To further curb fraud, the apex bank ordered banks and acquirers to deploy robust transaction monitoring systems capable of identifying unusual or suspicious patterns involving foreign cards across all payment channels.
Merchants handling foreign card payments are to be subjected to enhanced know-your-customer (KYC) and anti-money laundering (AML) checks.
Where transactions raise red flags, merchants are required to request valid identification from customers and ensure that receipts for card-present transactions are properly signed.
All suspicious transactions must be promptly reported to the Nigerian Financial Intelligence Unit in line with existing regulations.
The CBN also stressed the importance of transparency in pricing and settlements.
Banks and acquirers are required to clearly communicate applicable exchange rates to customers before transactions are completed.
Exchange rates must be market-driven and based on prevailing official rates, with all charges disclosed upfront.
Transactions are to proceed only after customers have explicitly accepted the terms, and evidence of such consent must be retained.
In addition, payment acquirers are required to organise quarterly training for merchants and agent networks on dispute resolution and chargeback handling.
The regulator warned that consumer complaints related to foreign card transactions must be resolved within approved timelines, noting that unresolved issues escalated to the CBN would attract appropriate sanctions.
Tourists and Nigerians returning from abroad who encounter difficulties using foreign-issued cards were advised to report such incidents to the CBN’s Consumer Protection and Financial Inclusion Department.
The apex bank further directed institutions to recalibrate their fraud-monitoring systems to reduce false declines on legitimate transactions, a move aimed at improving the overall payment experience for visitors and returning residents.
For low-value transactions, card acceptance devices are expected to support contactless payment options.
The circular also introduced stricter requirements for dispute management and chargebacks.
Acquirers must establish and maintain auditable chargeback processes in line with card scheme rules and CBN guidelines, covering timely case handling, evidence gathering, refunds, and post-incident reviews.
Financial institutions are also required to retain transaction records, including approval slips, signed merchant receipts, and descriptions of goods or services, for a minimum of 12 months. Such records must be retrievable within 24 hours upon request.
The CBN said the new measures were aimed at balancing improved security with convenience, while strengthening confidence in Nigeria’s electronic payment ecosystem.
