The Central Bank of Nigeria (CBN) has directed banks and other financial institutions to introduce multi-factor authentication for transactions carried out with foreign-issued payment cards, as part of new measures to strengthen security and boost user confidence.

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.

Addressed to all deposit money banks and non-bank financial institutions, the circular requires that multi-factor authentication be applied to foreign card withdrawals and online transactions that exceed daily, weekly, and monthly thresholds of 200 dollars, 500 dollars, and 1,000 dollars respectively, or their naira equivalents.

According to the apex bank, the policy is aimed at improving transaction safety while enhancing the payment experience for tourists and Nigerians returning from the diaspora.

The CBN explained that the initiative is designed to promote convenience, reliability, and confidence in the use of foreign-issued cards across the country.

Under the new guidelines, banks and non-bank acquirers are required to guarantee seamless access to cash withdrawals, payments, and transfers in local currency for holders of international cards.

Financial institutions must also maintain high system uptime to avoid service interruptions during transaction processing.

The regulator further directed that all automated teller machines, point-of-sale terminals, and online payment platforms be properly configured to accept foreign cards routed through Nigerian acquirers.

These platforms must comply fully with global card scheme standards and hold the necessary certifications to ensure smooth processing.

Also, all settlements arising from foreign card transactions are to be conducted strictly in naira, with banks expected to maintain sufficient liquidity to meet settlement obligations promptly.

The CBN ordered the deployment of advanced transaction-monitoring systems capable of detecting unusual or suspicious foreign card usage.

Merchants accepting such payments are also to be subjected to enhanced know-your-customer and anti-money laundering checks, including verification of valid identification where necessary.

Any suspicious transaction must be reported immediately to the Nigerian Financial Intelligence Unit, in line with existing regulations.

The CBN also stressed transparency in pricing, directing banks and acquirers to clearly disclose applicable exchange rates and charges to customers before completing transactions.

Exchange rates must be market-based, aligned with the official rate, and accepted by customers prior to processing, with evidence of consent properly documented.

As part of merchant capacity development, acquirers were instructed to organise quarterly training sessions on dispute resolution and chargeback management.

The apex bank warned that unresolved consumer complaints escalated to the CBN would attract appropriate sanctions.

Tourists and returning Nigerians experiencing challenges with foreign card usage were advised to lodge complaints with the CBN’s Consumer Protection and Financial Inclusion Department.

To further enhance user experience, especially for visitors, financial institutions were told to recalibrate fraud-monitoring systems to reduce unnecessary declines of genuine transactions, while low-value payments should support contactless options.

The circular also introduced stricter chargeback and dispute management requirements, mandating acquirers to maintain auditable processes and retain transaction records for at least 12 months, with such records to be produced within 24 hours when requested.