The Central Bank of Nigeria (CBN) has announced its intention to conduct a thorough review of its licensing framework for payment services.
This move is aimed at developing a new regulatory and compliance framework for the payment service sector, addressing concerns raised by recent developments in the space.
CBN Governor, Olayemi Cardoso, disclosed this during the Chartered Institute of Bankers of Nigeria’s annual dinner in Lagos.
While acknowledging the pivotal role of technology in delivering financial services and enhancing financial inclusion, Cardoso expressed concerns about the current state of the payment services landscape.
He emphasized that the CBN had observed instances where licensees operated outside approved activities, breaching established boundaries. Cardoso warned that intentional or unintended non-compliance would result in sanctions, emphasizing the responsibility of operators to ensure alignment with their licensed activities.
To address these challenges, Cardoso announced plans for a comprehensive review of the licensing framework for payment services.
He stated, “Concurrently, as we conduct a comprehensive review of the licensing framework for payment services, we will engage in extensive consultations to develop a new regulatory and compliance framework that is suitable for the technology-driven payment services sector.”
As of now, payment service providers can operate with various licenses, including Payment Service Provider License, Payment Terminal Service Provider License, Mobile Money Operator License, Switching and Processing License, or a Payment Solution Service Provider License.
In a circular dated December 9, 2020, the CBN had introduced new license categorizations for the payments system, streamlining activities permissible under payments system licensing to switching and processing, mobile money operations, payment solution services, and regulatory sandbox.
Cardoso also underscored the role of fintechs in contributing to Nigeria’s GDP target of $1 trillion and enhancing capital inflows.
“Sectors including agri-processing, oil & gas, manufacturing, solid minerals, fintech and information technology, real estate construction and infrastructure, among others are expected to attract significant capital investments,” he said.
“As these sectors expand, so will opportunities for incumbent players and new entrants alike, which are willing to make calculated bets as economic spaces open from the expansion of the economy.”