Banks received a directive from the Nigeria Inter-Bank Settlement System (NIBSS) to disconnect Switches, Payment Solution Service Providers, and Super Agents from the Instant Payment Outwards System.
The circular, dated December 5, 2023 (Ref: NIBSS/BD/NI/PO/005/051223), outlined that listing non-deposit-taking financial institutions as beneficiaries goes against the Central Bank of Nigeria’s electronic payment guidelines.
This directive may impact major players like Flutterwave, eTranzact, and Paystack, among others such as ChamsSwitch, Terra Switching and Processing, Appzone, Arca Payments Company, Coralpay, Habaripay, Hydrogen Payment Services, Network International, Unified Payment Services, and Xpress Payment Solutions.
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It said, “This is to bring to your attention that listing non-deposit-taking financial institutions such as Switching Companies, Payment Solution Service Providers, and Super Agents as beneficiary institutions on your NIP funds transfer channels contravenes the CBN Guidelines on Electronic Payment of Salaries, Pensions, Suppliers, and Taxes in Nigeria dated February 2014.”
It highlighted that although switches, PSSPs, and SAs might handle outward transfers as inflows to banks, they “are not to receive inflows as their licences do not permit them to hold customers’ funds.”
It added, “Another regulatory advice in this regard is the circular with the caption ‘Permissible Services and Products of PSSP Operation in Nigeria’, Ref: BPD/DIR/GEN/CIR/05/004 dated May 11, 2018. Consequent on the above, kindly delist all Switches, PSSPs, and SAs from your NIP Outward Transfer channels only (not inwards).”
To engage within Nigeria’s payment framework, operators must obtain one of the following licenses from the CBN: Switching and Processing, Mobile Money Operations, Payment Solution Services, or Regulatory Sandbox.
As stipulated by the CBN, only Mobile Money Operators (MMOs) are authorized to hold customer funds.
