How are people paying for dollar-denominated goods these days?

Ever tried buying something online and your card was rejected? I have. In my case, I contacted the bank’s customer care who told me they have stopped all foreign transactions. The agent said something about it being a ‘management decision’.

Well, as you can guess, I opened a new account with another bank the following week. Since then, dollar transactions have gone smoothly for me. So, how do people pay for dollar-denominated goods these days? Is a debit card the only way?

Debit cards would’ve been a great option if not for the $100 CBN limit. However, there are alternatives that makes it possible to go above this limit. Below are methods people use for paying for dollar-denominated goods.

1. Domiciliary account and get a dollar card

A domiciliary account is a bank account denominated in foreign currencies. Opening a dom account is as easy as walking into your local bank branch. I walked into a GT bank branch last week to inquire about opening a dom account. I was asked to come with the following requirements,

• Two passports
• A valid ID
• Utility bill for any of the last three months
• Two references

The references are to fill a reference form which will be given to you. They must be owners of current account, preferably with GT bank. To get the GTBank dollar MasterCard, you’ll request for and fill the dollar card application form. Issuance fee is $10.

First, Access and UBA banks are some of the banks that offer dollar denominated cards. The application process may be slightly different from GTB’s. Banks may fix their terms of use when you get their cards. For example, UBA allows a maximum of $5,000 daily for online transactions.

2. Use a naira-denominated debit card

This is the most popular option today. The one snag with this is that you are restricted to CBN’s monthly spend cap of $100. In addition, the exchange rates may differ with bank. Before now, GTB was charging ₦320 to $1 while Access bank was at ₦325 – $1. They both changed recently to ₦375 – $1. It is hoped that the increased rates will lead to a removal of the monthly spend cap.

With your usual debit card, all you have to do is input your card details and your transaction goes through. From the few banks I tested, Access bank (VISA) and GTB (MasterCard) work fluidly. Recently, I heard rumours that UBA (MasterCard) also works and charges less than ₦375 – $1.

3. Payoneer ATM card

Payoneer is an online payment/money-transfer service that helps freelancers, traders get paid or pay for services. When you open a Payoneer account, you can request for a Payoneer ATM card. They send the card to the closest post office to the address specified in your Payoneer account. The delivery may take between 2-6 weeks and is free.

Due to how some post offices operate, sometimes your card may get missing in transit. Even when Payoneer says your card has been delivered, the postal worker may tell you they have not seen any card.

Personally, I’ve applied for the card twice to no avail. The man at the post office kept saying “I have not seen any card”. One solution to this problem is to apply for expedited shipping. This option comes at a $40 cost but be rest assured that your Payoneer ATM card will arrive at your doorstep in about a week.

How to fund your Payoneer account

From the much I know, you can’t fund your Payoneer account from your naira bank account. Instead you can do this by either receiving payments for services rendered or you buy funds from exchangers.

For Freelancers, platforms such as Upwork and Freelancer.com allow you withdraw your earnings to your Payoneer account. The funds in your Payoneer can then be used on any website that accepts MasterCard.

To get funds through exchangers, simply meet any exchanger who deals in Payoneer funds. Tell them how much you want, agree on an exchange rate, pay into their Nigerian bank account and your Payoneer is credited.

4. PayPal

It is no longer news that PayPal is now in Nigeria AND you can’t receive payments with it. You can only spend or send funds. PayPal has a vast reach with acceptance stretching countless shops worldwide. To use PayPal, you’ll need to sign up and link your naira debit card. You can see this article for a more detailed guide on signing up for PayPal.

It’s been reported that some Nigeria banks no longer support PayPal so confirm from your bank before signing up.

5. Barter

Barter is a new virtual card service. To use Barter, you’ll need to open an account on the website. You can then fund your account in naira. Barter generates a virtual card for you, which you can use on websites without restrictions. The project is currently in beta mode and is free to use.

Although Barter has been met mixed reviews, I included it in the list because of the ingenuity and reported successes.

6. Pay4me services by exchangers

Pay4me is another service offered by exchangers. You look for an item you want to buy, send the exchanger the link, agree on a rate, pay into their bank account and they pay for the goods for you. For example, I may see a book I want to buy on Amazon and  contact an exchanger to tell him what I want. We then agree on a rate and he sends me his account details to pay in naira. After confirming my payment, he pays for the book and it is shipped to me.

You’ll see that Pay4me services are built on trust for it to work. You have to be careful with who you’re transacting with and trust them enough to go ahead with the transaction.

How are you paying in foreign currencies these days? share with me in the comment section below.