CBN Directs Banks to Enforce Multi-Factor Authentication for Foreign Card Transactions

• The Central Bank of Nigeria has directed banks and financial institutions to implement multi-factor authentication for foreign-issued card transactions exceeding set limits, as part of efforts to enhance security and improve user experience.

The Central Bank of Nigeria (CBN) has directed all banks and other financial institutions to implement multi-factor authentication (MFA) for foreign-issued card transactions, as part of measures aimed at improving transaction security and enhancing user experience in Nigeria.

The directive was contained in a circular dated December 18, 2025, 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 applies to all withdrawals and online transactions exceeding $200 daily, $500 weekly, and $1,000 monthly, or their naira equivalents.

According to the apex bank, the move is intended to strengthen transaction security, reduce fraud risks, and improve convenience for tourists and Nigerians returning from the diaspora who rely on foreign-issued payment cards.

Under the directive, banks and non-bank financial institutions are required to ensure uninterrupted local currency withdrawals, payments, and transfers for foreign card users across the country. All automated teller machines (ATMs), point-of-sale (PoS) terminals, and web-based payment platforms must be properly configured to accept international cards routed through Nigerian acquirers.

The CBN also mandated that all terminals comply fully with global card association standards and maintain valid certifications or recertifications to support seamless transaction processing.

In addition, all merchant settlements from foreign card transactions must be conducted strictly in naira, with financial institutions maintaining sufficient liquidity to meet settlement obligations.

To further curb fraud, the regulator instructed banks and acquirers to deploy robust transaction-monitoring systems capable of detecting unusual usage patterns involving foreign cards. Merchants handling such payments are also required to comply with strengthened know-your-customer (KYC) and anti-money laundering (AML) controls, including requesting valid identification where transactions appear suspicious.

The circular further directed that suspicious transactions be promptly reported to the Nigerian Financial Intelligence Unit (NFIU) in line with existing regulations.

On pricing transparency, the CBN stressed that applicable exchange rates must be clearly communicated to customers before transactions are completed. Exchange rates are required to be market-driven and based on the prevailing official rate, with all charges disclosed upfront and transactions processed only after customers explicitly accept the terms.

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Financial institutions were also directed to resolve consumer complaints within approved timelines, warning that unresolved cases escalated to the CBN would attract sanctions.

The apex bank further advised tourists and Nigerians in the diaspora who experience challenges using foreign-issued cards to report such incidents to the CBN’s Consumer Protection and Financial Inclusion Department.

Additional measures include recalibrating fraud-monitoring systems to minimise false transaction declines, introducing contactless payment options for low-value transactions, and implementing robust chargeback and dispute-resolution frameworks.

Acquirers are required to retain transaction records, including approval slips and signed receipts, for at least 12 months, with documents retrievable within 24 hours upon request.