Problems with credit/debit cards issued in Nigeria
On the 15th of October 2004, Ecobank Nigeria Plc made history when it launched the first ever internationally accepted credit card in Nigeria - the Ecobank MasterCard. With the launch of the Ecobank MasterCard, Ecobank availed Nigerians the benefits and privileges of a convenient international payment card for online and offline financial transactions. The challenges hitherto faced by Nigerians in making payments via the Internet or withdrawing cash abroad were set to become a thing of the past.
Several leading banks in Nigeria have since followed the steps of Ecobank, issuing international Mastercard and/or Visa card products.These banks include: UBA Plc, Zenith Bank Plc, Guaranty Trust Bank Plc, First Bank of Nigeria, Access Bank Plc, Intercontinental Bank Plc.
There are several problems with these cards however:
1. Acquisition: Obtaining a credit card from any responsible financial institution should necessarily be rigorous but not to the extent of discouraging the customer. Expect a Nigerian bank to ask for several documents since there is no national database of Nigerian residents that can be used to verify the identity and credit-worthiness of a potential customer. Photo IDs, reference letters, utility bills, bank statements, pay slips (for salary earners), company registration documents (for corporate customers) are among the documents the banks will ask for. Fair enough, a know-your-customer policy needs to be implemented in strict terms to guard against money laundering or any other financial crimes but the sad truth is that not every genuine customer can provide all the necessary documents. Thus, a federal database with every resident easily traceable using an ID number would have reduced the red-tapes.
2. Acceptability: This for me, is the most important issue here. Theoretically, Mastercard/Visa cards issued in Nigeria are acceptable anywhere in the world where there are internationally-linked Mastercard/Visa ATMs, POS terminals or websites powered by payment processors that accept international cards. However, this is not always the case. The terrible reputation Nigeria has on the Internet in terms of fraudulent financial transactions, has seen to it that the word “Nigeria” draws red-flags. To be on the safe side, many internet merchants decline transactions involving a credit/debit card issued in Nigeria [yours truly included], and a Nigerian billing or shipping address. There are also reports of some ATMs in the UK rejecting rejecting cards issued by Nigerian financial institutions - I am unable to verify these claims independently. All these have virtually made such cards mere objects of decoration for the wallets of their holders. Of what use is a card that will be rejected on the Internet?
3. Convenience: To obtain a Mastercard from many of the banks in Nigeria, you need a domiciliary account (essentially a foreign currency account denominated in US Dollars, British Pounds or Euro). The card is not directly linked to the domiciliary account and you would still need to transfer funds to the card to make payments online. This extra hurdle is not necessary in my view and only creates an extra inconvenience.
4. Fees: The best example to illustrate this point is to look at the entry fees for the FirstBank Mastercard. The card has a minimum credit limit of $500 and a maximum limit of $10,000 - limits are in multiples of $500, the card is secured by a 125% cash collateral! 
and the customer must provide a minimum deposit of $625 to obtain the card, amongst other requirements. Source: First Bank of Nigeria website. Many of the banks also charge their customers varying monthly/annual fees.
Many of the cards issued in Nigeria are inadvertently labelled secured credit cards or prepaid credit cards whereas the best description for such cards would have been: debit cards. Most of the card products in Nigeria are backed by cash! There are real credit cards though. I know Ecobank and Access Bank issue real credit cards that are not backed by cash but these are only feasible for traceable salary-earners or high net worth business owners.
There is no better way to conclude this blog post than to reproduce the reply of Propre on Nairaland: Re: To Get Legitimate Credit Cards in Nigeria « #3 on: September 27, 2005, 09:19 AM »
Obtaining a credit card in Nigeria is one thing, being able to use the card on the internet is another – for a credit card merchant to accept your card as a form of payment and deliver your goods/services as ordered requires trust; the knowledge or peace of mind that the transaction wouldn’t be charged back.
Nigeria has lost credibility, a browse on eBay will show that Nigerians in Nigeria are specifically being excluded from bidding for fear of fraud, 90% of online merchant wouldn’t sell to Nigerians with a Nigeria address or shipped to Nigeria.
It is nice and a good thing that credit card are now being issued in Nigeria; this is a welcome development, however a lot need to be done by the card issuers in Nigeria and the government in PR to try and redeem Nigeria image domestically and in the international arena before credit card issued in Nigeria on a Nigerian address can be widely accepted by online merchant.
What are your thoughts on this issue? Do you hold a card issued by a Nigerian bank? Have you experienced any problems with using it? Share your opinion by posting your comment.
Mar 23rd, 2008 at 3:26 pm
In some ways I think that all these technologies and opportunities being introduced in nigeria whilst an attempt to bring us to par with other nations in the western world, have not taken into considerations the current state of affairs.
Yes, you want to buy something online. They have agreed to ship it to you in Nigeria. How does your mailing system work? What about getting the item into the countryn the first place?
Rather than see how those who use the internet fraud can be targeted and possibly reformed into a workforce for inter-online (if such a word can be used) services, trade and business, we ignore their existence and imagine that with each new introduction they leave us a alone? Not going to happen.
Still, I do applaud any attempt at all to make a change.
Mar 30th, 2008 at 7:00 pm
Great idea, but should be implemented well.
May 22nd, 2008 at 8:37 am
Well, you can say this again…it seems easier for a camel to pass through the eye of a needle than for a naija card to be accepted….
Honestly the frustration is much…do we all have to go abroad and open cards over there before we are accepted in the world…what a mere 21 year old american will get service for we would have to keep sending our passports, pictures, IDs andd all manner of personal information?
I think those issuing those cards need to do something about them because they are USELESS if not ACCEPTABLE seemlessly worldwide!
God will help us chikenan!!!
May 26th, 2008 at 10:36 am
It is appauling to see that the Nigerian Financial Departments do not see the havoc this is causing on our reputation.
I’m not suprised at the attitude though, Why wouldn’t a wealthy business man in the financial department in Nigeria ignore this issue when he probably has 4 kids overseas who have more than three credit cards to their name and he as well could get anything he wants off the internet because he probably owns a residence overseas and credit cards to shop with.
It’s simple….as long as those in charge are comfortable, they couldn’t be bothered about those who are not priviledged to do the things they can overseas.
First things first…we all know the criteria on the issuing of credits to the people…why can’t we enforce that first before launching the so called credit cards?
What happened to proper identification of Nigerians?
We should enforce security before thinking about what we cannot handle.
Don’t forget we are just a mere third world country and as such should learn from those that were in our shoes before they got to where they are now.
Imagine you forging series of documents in Nigeria and then you go scot free…you can’t do that overseas?
Security first then just maybe the banks would fill secured issuing credits to individuals.
1. All houses should be clearly identified and marked with post codes for international identification just as it’s done overseas
2. Card owners should have some sort of stable income before being issued cards….remember we are aiming at credit cards and not debit cards.
3. Those who cannot afford to operate a credit card should be issued the prepaid Visa cards, i think Zenith bank does that now.
4. There should be a body tracking transactions online and anywhere else to curb fraud.
I may not be perfect in my suggestions but the good thing is that it gives room for a debate.
I look forward to a Better Country Nigeria!
Jun 15th, 2008 at 2:14 pm
I think Nigerians are being labelled unjustly. we have millions of honest nigerians trying to do business.I think the task is to explain to whoever cares that they are losing business by not doing business with Nigerians. Why would master card internation give out franchis to Nigeria banks when they are aware that the same card would not be accepted.It is time we take legal action to redress all these problems
Jun 30th, 2008 at 12:35 pm
Personally i feel pained by the whole situation surrounding this country. I think if i run a bank abroad, i will typically reject all Nigerian transactions. I have a credit card & debit card from Intercontinental Bank. I understand it is easy to get provided you are qualified to have one. I also kno people who have used Intercontinental mastercard/maestro in Dubai and Medina. People worldwide want to do business, but Nigeria needs to build credibility. Any country where i can get a valid Driver’s License without a driving test has no credibility.
Jul 15th, 2008 at 7:58 am
I have recieved Credit Card Scanning from Mr Charles Brown , But I am not sure that it is true or just fraud card, Card Number 56789012354567890 and Name of Card Cirrus
Interswitch Name holder Sam Ang
This Is I want to confirm or make sure
Thank you in advance
Sam Ang
Jul 19th, 2008 at 9:45 am
@ Sam Ang Dang, DON’T GET SCAMMED!
Jul 20th, 2008 at 5:57 pm
Here, in the State of Israel a mastercard issued by UBA can’t work. Its a shame! Guys are just stranded. Is that how we can be at par with other nations? I think we need alot image cleansing and help ourselves.