UBA, Wema, Other Nigerian Banks Resume Foreign Transaction in Naira

• Wema Bank and UBA have announced the resumption of foreign transactions on their Naira cards after a three-year hiatus
• The decision follows improved liquidity in the foreign exchange market and reduced arbitrage opportunities
• Other banks, such as Standard Chartered and First Bank of Nigeria, had previously halted international transactions due to the ongoing FX shortage

Legit.ng journalist Zainab Iwayemi has 5-year-experience covering the Economy, Technology, and Capital Market.

Wema Bank and United Bank of Africa (UBA) have separately announced the resumption of foreign transactions on their naira cards.

This came after about three years since numerous banks stopped allowing foreign transactions using Naira debit cards.

UBA, in a recent notification to its customers, explained that the restart aligns with its continued dedication to providing smooth and improved banking services.

“In line with our continued commitment to providing you with seamless and enhanced banking experiences, we are pleased to inform you that all UBA Premium Naira Cards, including Gold, Platinum, and World variants, are now enabled for international transactions,” the statement reads.

“This means you can now use your Premium Naira Card for everyday payments, online shopping, POS, and ATM transactions across the world, with more ease and flexibility. If you haven’t used your card recently, now’s a great time to rediscover the convenience and prestige that comes with being a UBA Premium cardholder.”

In a recent statement, Wema Bank also announced that its customers can now "pay in dollars" using their naira cards.

“Your Wema Naira Mastercard just went global! Now you can pay in dollars on all your favourite international platforms: Amazon, eBay, AliExpress, Netflix, Spotify, YouTube,” the bank said.

The Cable reported that the decision by these banks to reactivate their naira cards for international transactions was bolstered by increased liquidity in the foreign currency (FX) market, according to Ayokunle Olubunmi, head of financial institutions ratings at Agusto & Co.

“The moderating premium on the parallel market transactions and the reduced arbitrage opportunities are also responsible for the decision,” he said.

A number of other banks similarly temporarily halted international transactions on ATMs and POS channels between July 2022 and January 2023 due to the ongoing FX shortage, which endangered the viability of important economic sectors.

Standard Chartered Bank halted international transactions on its Naira Visa debit card in July 2022. On September 21, 2022, First Bank of Nigeria (FBN) also announced that it would stop allowing foreign transactions using its Naira Mastercard.

FG finds solution to exchange rate concern

Legit.ng reported that a strategic venture capital effort has been launched by Nigeria and Japan to provide Naira-denominated financing to high-growth firms.

This strategy seeks to offer long-term concessional finance while protecting companies against exchange rate concerns.

To complete the fund's framework, Mr. Wale Edun, the Minister of Finance and Coordinating Minister of the Economy, met with representatives from the Japan International Cooperation Agency (JICA) and the Nigeria Sovereign Investment Authority (NSIA) in Abuja.

Source: Legit.ng