FG orders removal of non-deposit financial institutions from transfer list

112

Banks have been asked to disconnect Switches, Payment Solution Service Providers, and Super Agents from the Nigeria Inter-Bank Settlement System Instant Payment Outwards System.

The NIBSS announced this in a circular to banks on December 5, 2023, with Ref: NIBSS/BD/NI/PO/005/051223.

The inclusion of non-deposit-taking financial institutions as beneficiaries, according to the national payment infrastructure business, violates the Central Bank of Nigeria’s electronic payment regulation.

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 noted that while switches, PSSPs, and SAs may process 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 operate in Nigeria’s payment ecosystem, operators must get at least one of the following licences from the CBN, Switching and Processing; Mobile Money Operations; Payment Solution Services; and Regulatory Sandbox. Only MMOs can hold customer funds, according to the CBN.