CBN Orders Banks to Introduce Multi-Factor Authentication for Foreign Card Transactions
The Central Bank of Nigeria (CBN) has directed banks and other financial institutions to introduce multi-factor authentication (MFA) for foreign card transactions, as part of efforts to strengthen payment security and improve the use of international cards within the country.
The directive applies to foreign-issued cards used for ATM withdrawals and online transactions, particularly for higher-value payments.
Under the new policy, banks are required to deploy additional layers of verification beyond the traditional card and PIN system, ensuring that users are properly authenticated before transactions are completed.
According to the CBN, the move is aimed at reducing fraud, protecting cardholders, and enhancing confidence in Nigeria’s payment system, especially for foreign visitors, expatriates, and Nigerians returning from abroad who rely on international cards for daily transactions.
The apex bank noted that stronger authentication measures will help curb unauthorised access and misuse of foreign cards.
The directive also requires banks and licensed payment service providers to ensure that ATMs, point-of-sale terminals, and online payment platforms are properly configured to accept foreign cards without unnecessary restrictions.
Institutions are expected to maintain high system availability so that foreign card users can access funds seamlessly across Nigeria.
In addition, banks must clearly disclose exchange rates and applicable charges to customers before transactions are processed. Customers are required to explicitly accept these terms before completion of any foreign card transaction, in line with consumer protection standards.
The CBN further instructed financial institutions to strengthen transaction monitoring and fraud detection systems, while merchants handling foreign card payments are expected to comply with existing know-your-customer and anti-money-laundering requirements. Suspicious transactions are to be promptly reported to the appropriate authorities.
Banks and payment providers have also been warned to improve their customer complaint resolution processes, with unresolved cases subject to regulatory review. Failure to comply with the new guidelines could attract sanctions from the regulator.
The latest directive underscores the CBN’s broader push to modernise Nigeria’s payment infrastructure, balance security with ease of use, and make the country more accommodating for international financial transactions while safeguarding the system against abuse.
