Wema Bank increases foreign currency spending limit on Naira cards

Wema Bank has resumed international transactions on its Naira cards with a $500 monthly limit, effective immediately. The bank disclosed this in a circular to its customers on Friday.

“You can now use your Naira cards, including Mastercard, ALAT Mastercard, and Visa, for international spending. For your international transactions, you can enjoy up to $500 per month,” reads the notice seen by Bendada.com.

Wema is the first Nigerian bank to increase the limit on international transactions which was lowered to $2 per month last year.

Why is this happening?

This development comes as a result of reviews on monetary policies in the country; including the unification of all segments of the Nigerian forex market, collapsing all windows into the Investors & Exporters (I&E) window. Introduced in April 2017, the I&E window encourages foreign direct investment (FDI) and enhances transparency in the FX market. It allows investors, exporters, and other participants to trade foreign currencies at market-determined exchange rates.

Related Article: Unifying Nigeria's Exchange Rate: The journey here and its implications

These regulations have boosted the FX supply in the country. For instance, last week, the Central Bank of Nigeria lifted a three-year ban on Naira payouts for diaspora remittances allowing the 62 approved International Money Transfer Operators (IMTOs) to pay recipients in Naira.

Still, on the back of President Bola Tinubu's forex policies, Access Bank and American fintech Remitly have partnered to allow customers to receive and deposit cash in Dollars in all Access Bank branches.

According to Access Bank, the transactions will be available to both account and non-account holders requiring only a valid ID for dollar pickups. The bank stated that an instant domiciliary account is opened up on receipt of remittance payment.

On Wednesday, Nigerian fintech Paga disclosed that it is available for businesses from any remittance company interested in local partnerships. “Paga is wide open for business for any remittance company looking for a local partner. Remittances can be delivered to any phone number or financial institution with great reliability,” says Tayo Oviosu, CEO of Paga.

Before now

Last year, several Nigerian banks including Wema Bank suspend international transactions due to foreign exchange pressure occasioned by dollar supply shortage, monthly spending limit was also lowered to $20 by most banks at some point.

The suspension and limit affected several Nigerian residents who use these cards for transactions on digital platforms like Netflix and Amazon. It was even worse because several virtual card providers in the country indefinitely shut down their services in July 2022 due to a "necessary compliance audit" by Union54, the major card provider on the continent.

With the resumption of Wema, many other banks will also resume international transactions on Naira cards in the coming weeks.

Editor's Note: This is a developing story