You may have been facing problems while trying to use your regular Nigerian bank debit card for foreign online transactions like paying for Facebook ads, Amazon, Google, Spotify, or even Netflix subscriptions.
It becomes nearly difficult to do foreign business because of the $20 daily cap on overseas transfers by Nigerian banks. Interestingly, many Nigerians have found a solution to this with the advent of virtual dollar cards.
Virtual dollar card apps can help with all that. These cards are available through an app, so you can’t use them for in-person shopping, but they work very well for online purchases. They are also far more straightforward to get than a physical dollar card because they have no physical equivalent, and you don’t have to wait for them to come by mail. Typically, they are prepaid cards that must be filled from a card or account with naira.
What is a Virtual Dollar card?
A virtual card is a card with all the features of a regular credit or debit card, but one that is not a physical card. It is a card that holds money like your standard bank account. Virtual cards give you access to your bank accounts and make transactions like a physical debit or credit card without carrying it around. Some virtual cards even offer cashback deals which means you can earn rewards on everyday spending like groceries or utilities.
Why Do You Need a Virtual Dollar card in Nigeria?
In the first quarter of 2022, Nigerian banks reached an agreement. Clients got emails warning them of (another) decrease in the limit on their debit cards. The monthly restrictions for overseas transactions made using naira debit cards were reduced from $100 (or approximately 50,000) to $20 (or about 10,000).
The lack of foreign currency was once more mentioned as the new cap. However, this time, the excuse for the action sounded absurd because there had been a rise in the price of energy on the international market. However, Nigeria, one of the most significant oil exporters, has currency problems.
The Challenges of the Naira Card Restrictions
As a result of this newly imposed limit, many Nigerians have found it very frustrating to pay for most online services.
These debit cards now exist only for cash withdrawal and local payment purposes (if the network does not misbehave).
One could wonder if these cards truly fulfill the reason for their creation as a better alternative to cash payments.
Here is a shortlist of what Nigerians can no longer pay for with their debit cards:
- Online courses on platforms like Udemy & Coursera,
- Online shopping on stores like ASOS, Shein & AliExpress,
- Instagram Ads, Facebook Ads
- Streaming platform subscriptions to Apple Music, Spotify & YouTube Music,
- Online Gaming subscriptions,
- Audible & Medium Subscriptions,
- Shopify, Web hosting & Server space subscriptions.
From the above list, it would not be dramatic to consider owning a Nigerian bank-issued Naira debit card a liability rather than an asset. When one also considers the present state of the Nigerian economy, it isn’t easy to foresee these debit cards becoming useful anytime soon.
The Free Virtual Card Apps that Work in Nigeria
Here are the apps that will allow you to easily create Virtual Dollar Cards:
- Chipper cash
- Wallets Africa
1. Chipper Cash App
Thanks to an app called Chipper Cash, a pre-funded, reloadable virtual Visa card called the Chipper Cash Card can be used to make online purchases. The card functions similarly to how your local bank card functions online. The card is accepted everywhere Visa cards are accepted for online purchases. It may also be used to purchase anything online with your Chipper cash wallet, including Netflix subscriptions, flights, and other services.
I currently used Chipper cash, primarily when Barter stopped issuing dollar cards. I have used it for several payments, from Instagram ads to Semrush, to Google payments to even buying from Aliexpress, and all transactions went through!
This app has two kinds of accounts – Tier 1 and Tier 2. Tier 1 and Tier 2 wallets/accounts are available on Chipper Cash. While the app’s tier 2 wallet gives you access to more functions, the tier 1 wallet has numerous restrictions. According to Chipper Cash, 5% cash back is offered on all purchases.
2. ALAT Virtual Dollar Card
ALAT is a digital-only brand operated by Wema Bank, a commercial bank active in all of Nigeria.
Alat offers a complete banking package with bank accounts, physical debit cards, savings, and loans. It is one of the best virtual dollar cards in Nigeria. Once your account is set up and funded, you can load your card straight from your naira balance for up to $20,000 and change the dollars back into naira if you need to. However, you can’t use it on money transfer websites which is not compatible with 3D Secure.
3. Wallets Africa
Wallets Africa is a Nigerian startup that provides virtual and physical naira and dollar cards.
For travelers who don’t want a physical card to be seen when traveling, this digital wallet is 100% risk-free. All you need to provide is your email address at checkout, and your billing information will remain private. However, this comes at a cost, your card comes with a monthly $1 fee, a $0.75 fee on every foreign transaction, and a 2% fee to load it from an external account.
You Might Want to Read: 7 New Technology Trends That Will Drive Innovation In 2023