Non-deposit Financial Institutions to be Disconnected From Money Transfer List of Banks

The Nigeria Inter-Bank Settlement System, Instant Payment Outwards System (NIBSS) has revealed that non-deposit-taking financial institutions can no longer be listed on NIP funds transfer channels.

The listing of institutions such as Switches, Payment Solution Service Providers, and Super Agents are now considered as contravening the Central Bank of Nigeria (CBN) guideline on electronic payment.

The Nigeria Inter-Bank Settlement System, Instant Payment Outwards System(NIBSS) disclosed this in a circular dated December 5, 2023, with Ref: NIBSS/BD/NI/PO/005/051223 to banks.

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.

“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).”

It further stated that while Switches, Payment Solution Service Providers, and Super Agents can engage in outward transfer of funds as inflows to banks, they will not be allowed to receive inflows because their licences do not permit them to hold customers’ funds.

In Nigeria, to operate within the payment ecosystem, operators are expected to have, at least one of the following licences from the CBN; Switching and Processing; Mobile Money Operations; Payment Solution Services; and Regulatory Sandbox.

CBN regulations indicated that only MMOs can hold customers’ funds.

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