The Central Bank of Nigeria (CBN) has directed banks and other financial institutions to implement multi-factor authentication (MFA) for transactions carried out with foreign-issued payment cards, as part of efforts to boost security, reduce fraud and improve payment experiences for tourists and Nigerians returning from overseas.
The directive, contained in a circular dated 18 December 2025, was issued by the CBN’s Financial Policy and Regulation Department and signed by its Director, Dr Rita I. Sike. Titled “Facilitation of Seamless Use of Foreign Cards,” the circular outlines new operational, compliance and consumer-protection obligations for banks, payment service providers and merchants across the country.
Under the new rules, MFA will be mandatory for all withdrawals and online transactions involving foreign cards that exceed $200 daily, $500 weekly and $1,000 monthly, or their naira equivalents. The apex bank said the thresholds are intended to balance stronger security controls with ease of payment for legitimate users.
In addition, banks and non-bank acquirers have been instructed to ensure uninterrupted access for foreign cardholders, enabling them to withdraw cash, make payments and complete transfers in local currency nationwide. Financial institutions are also required to maintain high system uptime to guarantee seamless transaction processing.
The CBN further stressed compliance with international card scheme standards, directing that all payment terminals must carry valid certifications or renewals to prevent service failures. It also mandated that merchant settlements from foreign card transactions be conducted strictly in naira, while institutions must maintain adequate liquidity to meet settlement obligations promptly.
To curb fraud, the regulator ordered the deployment of advanced transaction-monitoring systems capable of identifying suspicious or unusual usage patterns involving foreign cards. Merchants accepting such cards will now be subject to enhanced know-your-customer (KYC) and anti-money laundering (AML) checks.
Where transactions appear questionable, merchants are required to request valid identification, ensure receipts for card-present transactions are properly signed, and report such cases to the Nigerian Financial Intelligence Unit (NFIU) in line with existing regulations.
On pricing transparency, the CBN directed that customers must be clearly informed of applicable exchange rates before completing any transaction. Rates must align with the prevailing official market rate, and all charges must be disclosed upfront. Transactions are to proceed only after customers have explicitly accepted the stated terms, with proof of acceptance retained.
The circular also introduced stricter requirements for dispute resolution and chargeback management. Acquirers are to organise quarterly training for merchants and agent networks on handling disputes and chargebacks, and maintain auditable processes covering case intake, evidence management, refunds and post-incident reviews.
The apex bank warned that complaints related to foreign card transactions must be resolved within prescribed timelines, noting that escalated cases referred to the CBN could attract sanctions where violations are established.
For low-value payments, the regulator encouraged the use of contactless card readers to speed up transactions and enhance convenience. Institutions were also directed to retain comprehensive transaction records for at least 12 months and make them available to regulators within 24 hours of request.
The CBN advised tourists and Nigerians returning from abroad who experience difficulties using foreign-issued cards to report such issues to its Consumer Protection and Financial Inclusion Department, reaffirming its commitment to protecting users and strengthening confidence in Nigeria’s payment system.
