Nigerians banks have started sending out emails to their customers informing them that they will no longer be allowed to freely use their debit cards in countries that do not support use Chip and Pin authentication. They claim the directive is from the Central Bank. Here is an excerpt of an email received;
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Dear XXXXXXXXX, Due to the rising fraud incidences on payment cards abroad, the Central Bank of Nigeria (CBN) has directed that all payment cards issued by Nigerian Banks should be restricted in non-EuroPay Master and Visa (EMV) compliant countries including USA and all Asian Pacific countries (terminals that do not support chip andPIN authentication). If you are travelling to any of the concerned countries and intend to use your card, kindly follow these steps:
For enquiries, please call our 24 hour Contact Centre on 0700-300-0000, send SMS to 30811 or email enquiries@diamondbank.com Thank you for choosing Diamond, Your Bank. |
What this means:
Unlike in Nigeria, countries like the United States do not use chip and pin authentication for their debit cards. Rather than punch in a pin before using your cards you can simply swipe your card on a P.O.S and get your transaction done. This method is thought to be risky as fraudsters can simply swipe on your card whenever they steal it. Most stores in the US do not require that you punch in a pin number when you want to pay with your debit card.
While this may seem like a good move, critics of the CBN see it as yet another ploy to reign in on the demand for forex. Most Nigerians travel to the US and rely on their debit cards for transactions. By restricting the use of this card, the CBN is indirectly controlling the use of debit cards abroad yet again.
The CBN has issues a raft of policies in the last year all aimed at controlling the demand for dollars in the country. The result has been catastrophic with the disparity between the official rate and parallel market rate nearly as wide as N110. The naira closed at N305 against the dollar on last Friday.
The post above and its ensuing comments, if any, is purely the opinion of the writer(s). It therefore should never be considered as an investment advise of any sort. If required, readers should please consult a competent professional financial adviser for any investment decision.