The Nigeria Inter-Bank Settlement System (NIBSS) has issued a directive urging banks to remove Payment Solution Service Providers (PSSPs), Switches, and Super Agents from their outward payment or transfer lists. This move stems from the fact that these non-deposit-taking financial institutions, often labeled as Fintechs, are not authorized to hold customers’ funds as per their licenses.
In a circular dated December 5, 2023, with reference NIBSS/BD/NI/PO/005/051223, NIBSS highlighted the violation of Central Bank of Nigeria guidelines on electronic payments. The circular emphasized that while switches, PSSPs, and SAs may facilitate outward transfers, they should not be listed as beneficiaries for inflows, aligning with regulatory requirements.
To navigate Nigeria’s payment ecosystem, operators must obtain licenses such as Switching and Processing, Mobile Money Operations, Payment Solution Services, or Regulatory Sandbox from the Central Bank of Nigeria. The circular underlines the importance of compliance, reinforcing that only licensed entities with a minimum capital share of N2 billion, such as Mobile Money Operators, are authorized to hold customer funds according to CBN regulations from December 2020.
