As the crisis in the Foreign Exchange market and its effect on the economy assumes a new dimension, banks have announced the discontinuation of the use of their Naira debit and credit cards on all International gateways (ATM abroad, POS and Online transactions priced in currencies other than Naira)
Most banks have suspended their Naira ATM debit and credit cards from working on all oversea Automatic Teller Machines and all online transactions priced in foreign currencies.
FirstBank, Standard Chartered Bank Nigeria, Stanbic IBTC Bank, and Guaranty Trust Bank have all announced the suspension of foreign usage of their Naira cards as the scarcity of FX bites harder on the economy.
The recent efforts of the CBN instructing agents to International Money Transfer Operators and FirstBank to sell proceeds from diaspora remittance and foreign inflows to Bureau De Change operator is yet to yield desirable impact.
Nigerian Banker takes a look at the options available to parents who have their wards in schools abroad, holiday makers, medical tourists, professional paying membership and other dues, online shoppers, home remittance for expatriates in Nigeria and others:
Most bank offers Dollar Cards (Visa or MasterCard) except for a few that offers cards in other major Foreign currencies. Most credit card comes with cash backed collaterals and people that prefers credit card want them because it is more widely acceptable than debit cards. The cash collateral is between 100% to 130% depending on banks. the cash must be in the same currency which the card is issued.
Debit cards can either be prepaid or linked directly to your domiciliary account.
A prepaid debit card has its own wallet account linked to the card directly. It cannot be operated across the counter except for funding of the wallet. Some expert are of the opinion that prepaid card are a lot safer because you fund it to the limit of the amount you want to spend unlike the card that is linked directly to your domiciliary account.
The cost of dollar card is about $25 and spending limits varies from one bank to another. Most bank dollar cards have a limit of $1.000 per day on all channels (POS, Web and ATM cash withdrawals) combined. The limit can however be enhanced at request since you will be spending your cash.
Debit or Credit dollar cards are useful for all categories of users. The users must however source for the dollar and deposit into his or her domiciliary or card account before traveling. Parents can also get this cards from their banks and send it to their wards in schools abroad while the parent fund the account directly from here.
Personal Travel Allowance and Business Travel Allowance are another option available to holiday makers and medical tourist. Travelex currently sells PTA to travelers at the Muritala Muhammad International Airport but with the condition of providing a valid Visa, International passport and airline ticket and also your BVN card. A few banks also offer PTA and BTA sales at the maximum of $4,000 and $5,000 for PTA and BTA respectively. The rates varies from one bank to another but are however cheaper than the parallel market rate.
Foreign Transfers from domiciliary account
This option is more appropriate for payment of professional fees, membership subscription and all other remittance abroad including diaspora remittance and payment of school fees for ward studying abroad.
The bank customer will need to open a domiciliary account. Source for FX from BDCs and deposit it into the accounts and request his or her bank to transfer the money to the beneficiary institution or account abroad. You will need to contact the beneficiary institution to get their bank details.
The transfer however comes with a maximum transfer of $10,000 per day if it is a transfer from cash deposit and no limit if the deposit in the account is from inflow from another account.
Out bound money transfers
Western Union, Moneygram and Ria transfer offer this services for individual interested in making cash transfer to persons outside of Nigeria. The maximum amount is about $1,000 or equivalent in other currencies and can be done only once in every quarter by an individual. This service is particularly useful for parents and guidance wanting to give cash in whatever currency in any part of the world where this IMTOs operates. The beneficiary can pick up the cash upon identification and provision of specific informations share between him and the sender.
Form A are the cheapest means and alternative at this time because it is the mean by which CBN funds invisible trades. It is particularly useful for payment of school fees, medical bills settlement of loan obligations to foreign banks, home remittance for expatriate and all other foreign invisible transactions. The FX is sourced at CBN rate and will be honored only after successfully bidding by the banks . Lately however CBN has limit its funding for form A transactions to payment of school fees only and the Apex bank has not been able to meet with the demand as there are large numbers of request still unsatisfied.