Babatunji Wusu –
Banks in the nation are required under the Nigeria Inter-Bank Settlement System (NIBSS) to remove all financial institutions that do not accept deposits from their NIP fund transfer routes.
A circular addressed to banks on December 5, 2023, bearing the reference NIBSS/BD/NI/PO/005/051223, included this directive.
The Central Bank of Nigeria’s (CBN) guidelines on electronic payment are broken, according to the NIBSS, when non-deposit-taking financial institutions like Switching Companies, Payment Solution Service Providers, and Super Agents are listed as beneficiary institutions on the bank’s NIP funds transfer channels.
Although switches, PSSPs, and SAs are allowed to process outbound transfers as inflows to banks, the directive issued cautions that these entities “are not to receive inflows as their licences do not permit them to hold customers’ funds.”
The new directive may have an impact on numerous fintech companies utilized by Nigerians, such as Carbon and Palmpay.
The circular reads: “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 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).”
When this policy is put into effect, the impacted platforms will be allowed to help with outgoing transactions to banks, but they won’t be able to take in money.
To stay in business, the Fintechs can, nevertheless, seek for the necessary licenses.
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