The Nigeria Interbank Settlement System Plc (NIBSS) in a recent mandate has directed Nigerian Banks to discontinue all non-deposit-taking financial entities from Nigerian Interbank Payment (NIP) outward fund transfer channels.
The affected financial institutions include switching firms, payment solutions service providers, and super agents. The NIP fund transfer channels include USSD, Mobile banking apps, PoS, ATMs, and web and internet platforms. This was revealed in a circular by the NIBSS dated December 5, 2023, with Ref: NIBSS/BD/NI/PO/005/051223 to banks. The country’s payment system explained that listing non-deposit-taking financial institutions as beneficiaries contravenes the Central Bank of Nigeria guideline on electronic payment.
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.” It stressed that while switches, PSSPs, and SAs may process outward transfers as inflows to banks, they “are not to receive inflows as their licenses do not permit them to hold customers’ funds.”
NIBSS added, “Another regulatory advice in this regard is 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 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.”
It stressed that while switches, PSSPs, and SAs may process outward transfers as inflows to banks, they “are not to receive inflows as their licenses do not permit them to hold customers’ funds.”
NIBSS added, “Another regulatory advice in this regard is 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).”
