BusinessDay

CBN approves new licence requirements for the Payments System

… Switching and Processing, Mobile Money Operator require N2bn capital, others

The Central Bank of Nigeria (CBN) has approved new license requirements for the Payments System, adding that corporate entity eligible must be registered by the Corporate Affairs Commission (CAC) with Memorandum and Article of Association (MEMART).

The payments system plays a very crucial role in any economy, being the channel through which financial resources flow from one segment of the economy to the other.

It represents the major foundation of the modern market economy. Essentially, there are three pivotal roles for the payments system –the Monetary Policy role, the financial stability role and the overall economic role.

In the recent past, the Nigerian Payments System witnessed remarkable achievements with the introduction of a number of initiatives under the Payments System Vision 2020.

The Payment System initiatives include implementation of Bank Verification Number (BVN) scheme to address issues associated with the absence of unique identifier of bank customers across the industry; issuance of guidelines on International Money Transfer (IMT) services in Nigeria; issuance of revised guidelines for card issuance and usage in Nigeria; implementation of industry e-reference portal; and abolished fees on cash deposit above the cash-less policy threshold.

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Among other requirements as stated by the apex bank, any entity applying for the licence of Switching and Processing as well as that of Mobile Money Operator is required to have N2billion capital (shareholders’ funds unimpaired by losses); preceding 3-years audited financial statements (if applicable); escrow of refundable N2billion into CBN PSP Share Capital Deposit Account.

“Deposit for escrow must be in full (one lump sum). It must be made in the name of the company applying for licence (not an individual or related company). Escrowed funds are invested in treasury bills, subject to availability of treasury instruments, which would be refunded accordingly”, CBN said.

Also, applicants are required to pay a non-refundable application fee of N100,000, payable to the CBN via the Licensing Fees for Payment Products Account. The licensing fee of N1million is also to be paid before the issuance of the final licence, if successful.

The capital requirement for Payment Solution Services (PSS) licence is N250million (shareholders’ funds unimpaired by losses). The entity as well is required to present preceding 3-years audited financial statements of the company (if applicable) while escrow of refundable N250million (for entities applying for the three (3) licences at a time: PSSP – N100million, PTSP – N100million, and Super-Agent – N50million) payable into CBN PSP Share Capital Deposit Account

Entity applying for Payment Terminal Service Provider (PTSP) Licence is expected to among others have N100million capital (shareholders’ funds unimpaired by losses), preceding 3-years audited financial statements of the company (If applicable), and escrow of refundable N100million into CBN PSP Share Capital Deposit Account.

Also among others, the capital requirement for Payment Solution Service Provider (PSSP) licence is N100million, while that of Super-Agent Licence is N50million –both to show shareholders’ funds unimpaired by losses.