The Nigeria Inter-Bank Settlement System (NIBSS) has issued a circular instructing banks to remove Payment Solution Service Providers (PSSPs), Switches, and Super Agents from their outward payment or transfer lists.
The directive, outlined in a circular dated December 5, 2023, referenced Ref: NIBSS/BD/NI/PO/005/051223.
According to NIBSS, including non-deposit-taking financial institutions as beneficiaries on National Instant Payment (NIP) funds transfer channels is in violation of the Central Bank of Nigeria (CBN) guidelines on electronic payments.
The circular stated, “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.”
NIBSS emphasized that while switches, PSSPs, and Super Agents may facilitate outward transfers as inflows to banks, they are not permitted to receive inflows as their licenses do not authorize them to hold customers’ funds.
It further referred to the circular titled ‘Permissible Services and Products of PSSP Operation in Nigeria,’ Ref: BPD/DIR/GEN/CIR/05/004 dated May 11, 2018, as another regulatory guidance in this context.
In compliance with the directive, banks are required to delist all Switches, PSSPs, and Super Agents from their NIP outward transfer channels while still allowing inward transfers.
To operate in Nigeria’s payment ecosystem, entities must obtain specific licenses from the CBN, including Switching and Processing, Mobile Money Operations, Payment Solution Services, and Regulatory Sandbox.
The CBN regulations, as of December 2020, mandate that only Mobile Money Operators (MMOs) with a minimum capital share of N2 billion are authorized to hold customer funds.