Big fines for South Africans using credit and debit cards wrong

Nedbank has warned South Africans that failing to follow the regulatory limitations and obligations for debit and credit cards can result in punishments from the South African Reserve Bank (SARB) and the South African Revenue Service (SARS).
In a note sent to customers, Nedbank said that all credit, debit and virtual cards issued in South Africa have certain regulatory limitations and/or obligations when making international payments.
Following these rules is the responsibility of every cardholder.
Failure to follow the rules could result in fines and/or withholding of funds by the SARB as well as further penalties from SARS.
Nedbank reminded their customers of four essential rules:
1. No gambling
Nedbank said that customers cannot participate in online lotteries, gambling or sports betting activities with providers outside of South Africa using their credit, debit, or virtual cards.
Doing so will see the cardholder’s winnings confiscated and paid to the Gambling Board of South Africa.
2. Transactions are limited
All foreign transactions count towards a South African’s single discretionary allowance (SDA). This includes card payments and cash withdrawals.
An SDA allows South Africans to externalise funds for any legal purposes and is not subject to a foreign tax clearance (AIT) from SARS.
Nedbank warned that customers should not exceed their annual R1 million SDA limit.
3. Imports and subscriptions are capped
Online card payments for imports, subscriptions or services (excluding foreign travel-related) cannot exceed R50,000 each.
“You also may not split a payment that is over R50,000 into smaller transactions to avoid this rule:” said Nedbank.
“Regardless of the payment amount, you must pay any applicable import duties and follow customs requirements,” said Nedbank.
4. Funding foreign currency accounts is not allowed
Funding of foreign currency accounts, locally or abroad, can not be done via card payments.
Swift payments or cross-border transfers are only permitted to fund foreign currency accounts.
“This includes funding of international trading, investments, and crypto wallets or accounts,” the bank said.
“The funding of these types of transactions should be referred to an Authorised Dealer or bank to process within the prescribed rules.”
Not the first warning
Nedbank said customers should regularly check for updates from SARB and SARS to stay informed about any rule changes or amendments related to foreign investment allowances.
This is the second card-related warning for customers that Nedbank has sent within a week. The “Big Four” bank issued a fraud alert to its customers regarding debit card swipe transactions at toll gates.
The bank noted that due to ongoing debit card fraud, debit card swipe transactions at toll gates would be disabled from Monday, 20 January 2025.
However, Nedbank customers can still use credit cards, garage cards, cash, or tags at the nation’s toll gates.
“Toll gates are in the process of being converted to tap functionality, and those already enabled will accept contactless debit, credit cards and smart devices linked to contactless payment apps,” said Nedbank.
Previous reports from MyBroadband showed that paying with cards at toll gates can lead to fraud as motorists have to hand over their cards to collectors. This can lead to cards being cloned.
FNB said that the new contactless payment system would enhance security, reduce the possibility of fraud and allow users to keep cards or payment devices on their person during payment.
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