10 December 2017

Hafiz Adewuyi

How to use your GTBank Naira Mastercard on PayPal - Nigeria

Why can't I use my GTB Naira Mastercard card on PayPal anymore?

Have you asked yourself that question recently? Or the slightly different variant of "Why can't I use my GTBank Naira Mastercard on Paypal"? One other popular variant I imagine would be: "Why did GTBank block Nigerians from using their Naira Debit Mastercard on Paypal".

If you're looking for the answer to any of those questions, then be merry. Cos' today is the day that you find the solution to that problem. A surprisingly very simple solution, if I may say.

GTBank Naira Mastercard + PayPal
GTBank Naira Mastercard + PayPal

If you don't care for the full explanation of this problem, feel free to skip to the final section (How to unblock your GTBank Naira Mastercard on Paypal). The next 3 sections only serve to explain the problem so you can get the full story behind this undesirable restriction on your GTBank Naira Mastercard.

Why does my GTBank Naira Mastercard not work on Paypal (anymore)?

Before mid-2016 or so, my GTBank Naira Mastercard used to work seamlessly with PayPal. I added the card to PayPal and I sure used it a few times successfully before that time.

A few months ago, I 'bought' my first ever Linux virtual machine from Digital Ocean. At the point of payment, I tried to add my Fidelity Dollar debit Mastercard directly, but it failed with the error: "Digital Ocean does not currently accept debit cards".

Fortunately, Digital Ocean accepts Paypal. So, I just went ahead to add that Fidelity Dollar debit card to PayPal, and then use PayPal to pay Digital Ocean from the same card. At the time, I had about $10 in the domiciliary account linked to the debit card.

My payment went through seamlessly. And things were good until I ran out of dollars in my Fidelity Bank domiciliary account. Since I was not ready to buy dollars to fund the account, I had no choice but to try to use my GTBank Naira Mastercard (through PayPal) for the next Digital Ocean subscription.

Unfortunately, my payment failed. I remembered that the last time before that when I tried to use the GTBank Naira Mastercard via PayPal, my transaction also failed. I had assumed it was due to a network error. But now, when it failed multiple times back-to-back, I knew it had to be something more than that.

This was when I recalled reading from a thread on TechCabal's Radar about GTBank having blocked the use of their Naira Mastercard through PayPal. Hmm. I did a bit of Googling and decided that was likely to be the problem here.

However, since I had to keep paying for my Digital Ocean account, I had no option but to find a way to pay (and Paypal seemed like my only option). One option was to find out which Nigerian bank allows their Naira denominated debit cards to be used on PayPal. Needless to say, that's was likely to be a long thing, since I would at least, first have to request a new card. And at the worst, I might have had to open a new bank account. The fact that international transactions are completely blocked off on most Nigerian banks' cards (read Nigeria's FX crisis) is another headache on its own.

I decided to do a little more research before giving up on GTBank Naira Mastercard since that was easier than the above option. And fortunately, I found a solution in less than 30 minutes of googling. The reason my transactions were failing was simple. GTBank placed a DCC (Direct Currency Conversion) restriction on their Naira denominated cards.

What is DCC (Direct Currency Conversion)?

Essentially, PayPal was automatically converting my dollar transaction to Naira using CBN's official rate (because my card was a Naira denominated card). My transaction was a $5 transaction. When you multiply that by the CBN rate at the time (say 320:$1), my GTBank account would be charged for 1600 Naira.

The thing about doing international transactions with your Naira card is that, even if your card is charged in Naira, your bank has to find dollars to pay back the international merchant (settlement). So, if my $5 transaction had been successful, GTBank would have had to find a source of dollars cheaper than or equal to 320:$1 (CBN rate) to be able to settle the merchant for that transaction. If not, my transaction would have caused them a financial loss. GTBank's rate for customers at the time was about 380:$1. Which means that the bank would have lost a fraction of 300 Naira on this transaction, depending on their FX sourcing rate.

Now, you can think that such a minute loss is not too much for a bank like GTBank to bear for their customers. After all, they can probably get dollars at a rate close to the CBN official rate due to their might. However, when you multiply the marginal loss on a transaction by the several thousand (if not millions) Nigerians who use a GTBank Naira Mastercard for international shopping, it's not hard to imagine how the bank can end up neck deep in losses amounting to billions of Naira in a matter of days.

Hence, to curtail potential bankruptcy, GTBank blocked DCC transactions on their Naira Mastercard for all customers (which probably includes you). This means that when the bank's card processing system receives a transaction originating from an international location (not Nigeria) but bearing a charge in Naira, they instruct the system to automatically decline it by means of a system configuration.

I hope that you can agree with me at this point that the bank is justified in making this decision. After all, GTBank is very far from being a not-for-profit organization.

How can I use my GTBank Naira Mastercard on PayPal?

The solution to this problem is very simple. You simply need to get on GTBank's side of this FX economics to solve the problem. If GTBank's system receives your charge in dollars and not Naira for a transaction originating from the US, then it can use a rate decided by GTBank to convert the transaction to Naira before passing the charge to your account.

In this way, GTBank can ensure that they apply a rate to your transaction that is sufficiently higher than their dollar-sourcing rate to make them a good profit margin off of it after settling the merchant.

Hence, the solution is for you to instruct PayPal to not convert your transaction to Naira and instead, send the original transaction currency (e.g. dollars) like that to your bank. The process is very simple, but the interface to do it is inexplicably well-hidden away in their menu system. In fact, I noticed that the web page to make this setting change has the old PayPal look-and-feel. Not surprisingly, there's currently no way to navigate to this page on the modern PayPal UI menu.

The three-step process to remove the restriction on using your GTBank Naira Mastercard on PayPal comes next.

How to unblock your GTBank Naira Mastercard on Paypal

1. Visit the PayPal card setting management page on your internet browser by clicking here (you might have to log on to your PayPal account if you're not already logged in). To ensure that this is not a phishing attempt on your PayPal account, please verify that the certificate on the loaded page belongs to PayPal.

PayPal secure Certificate
PayPal secure Certificate


PayPal card currency conversion settings page
PayPal card currency conversion settings page


2. Click the Conversion Options link beside your GTBank Naira Mastercard in the list of cards

Ask Paypal to use Mastercard/VISA's currency conversion process, not theirs. This is what your bank wants
Ask Paypal to use Mastercard/VISA's currency conversion process, not theirs. This is what your bank wants

3. Most likely, the first option is selected on your GTBank card. The first option enables PayPal's currency conversion process which is what causes the whole DCC problem. Just select the second option (Bill me in the currency listed on the seller's (merchant's) invoice) and submit the form.

That's it! Just ensure your GTBank Naira Mastercard is well funded enough, then retry your PayPal transaction. It will be successful.  At least, so it was in my case. I followed this same process and not up to 5 minutes after, I was able to make a successful payment to the same Digital Ocean where my transaction had previously failed multiple times. 

P.S.
I think it would go a long way if GTBank would send a simple SMS or link to a customer to recommend possible solutions when their transaction fails because of a direct currency conversion.

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11 comments

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5 January 2018 at 22:35 delete

Please Admin,

What can I do to add my GTBank Naira MasterCard on PayPal because I have tried severally but to no avail.

Thanks for your support

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6 January 2018 at 09:10 delete

Hi Yusuf, you need to have money in the account because PayPal would need to do a $1 transaction on the card for initial verification. Once you confirm there's enough money in your GTB account for the $1 transaction and the problem still persists, you can use the Help and Resolution center on Paypal (once you log in) to report the problem to PayPal, stating that you suspect that the payment is failing due to the fact that they're sending that initial debit of $1 to GTBank in Naira instead of dollars. You'll then ask them if there's a way you can change this setting to send the transaction in the original currency ($) before you add a card.

Please, feel free to update me on progress.

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Harry
AUTHOR
6 January 2018 at 12:31 delete

I tried this method, didnt work for my GTB card o. It says "check card details". I tried and tried and all my details are correct. Same details I was using before GTB disabled usage of their cards on paypal a couple of years back. so what do I do next?

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10 January 2018 at 18:11 delete

Dear Hafiz,

I acknowledge the receipt of your prompt response.

I'll implement the solution you recommended to me and get back to you as soon as possible.

Thank you.

Regards

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10 January 2018 at 18:18 delete

Thanks Yusuf. Looking forward to your feedback!

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11 January 2018 at 10:27 delete

Dear Hafiz,

Please find below the response I got from PayPal while I await your reply Soon:


1/10/18 at 8:06 AM
Dear Yusuf Zakari,

I hope you are doing well today. It is my pleasure to clarify things with you.

Please note that we received an update that most banks in Nigeria (not only GTB) are no longer allowing the use of their Naira denominated debit cards for international payments through PayPal. Please contact your bank directly to know what other card(s) you can use on PayPal for online and international payments. You may also apply for another card from a different bank so that you can continue sending payments. You may also inquire if you can apply for a USD currency card because it can be used on PayPal for your purchases.

We'll be glad to hear from you if you need clarification or assistance.

Thank you for choosing PayPal. Have a great day!

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11 January 2018 at 10:44 delete

Can I see the email you sent to them as well?

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14 January 2018 at 22:16 delete

I have laid the matter to rest after that.

However, I used my UBA MasterCard and everything worked without any hitch. In fact,I successfully performed my transaction thereafter.

Thank you.

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18 January 2018 at 19:12 delete

thanks for the write-up. I cant link mt ATM card at all, thats my issue, clicking the link u posted, there's no card on the list , as ive not saved any.

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18 January 2018 at 22:09 delete

Hi Raji. Several of my readers have reported experiencing the same problem you face with adding a new card.

My advice would be for you to try another bank card based on the experience of the last user (Yusuf) who reported this issue.

Since this process works only for existing GTBank cards on PayPal.

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Anonymous
AUTHOR
21 January 2018 at 21:14 delete

You were able to add your UBA master card?? Cuz adding the card to my PayPal account is the main issue i have...

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