The Central Bank of Nigeria (CBN) will effective November 1, 2019, to commence the regulation of operations of Indirect Participants in the Payments System.
According to a circular signed by Sam Okojere, director, payments System management, and released on Thursday, the move is in furtherance of the CBN’s mandate for the development of the electronic payments system in the country.
The objectives of the regulation include to set out the procedures for effective integration of indirect participants in the payments system in Nigeria; standardise the operation of indirect participants in the payments system, taking into cognisance their operational risks; provide mechanism and framework for the clearing and settlement of indirect participants payment instruments through the direct participating banks; and strengthen indirect participants for effective contribution to digital financial services in Nigeria.
To qualify as an indirect participant, an institution is required to; have a satisfactory risk-based rating from the CBN and secure a letter of recommendation from its direct participating bank, signed by the Chief Risk Officer and an Executive Director of the direct participating bank; and comply with the NUBAN Standards.
The CBN said only direct participating banks are permitted to settle payment obligations of indirect participants.
An indirect participant shall settle all its payment obligations through only one direct participating bank per payment scheme at any given time.
According to the guidelines Indirect participants may take part in any of the following payments operations: Cheque Clearing; EFT & Bulk Payments; Instant Payments; Card Issuance;
Card Transaction Acquiring (ATM, POS, Web,etc.); Portals (e-Reference, Anti-Fraud, e-Signatory, e-Passport, etc.); Bank Verification Number System; and Any other component approved by the CBN.
