Banks are instructed by the Nigeria Inter-Bank Settlement System (NIBSS) to remove all financial institutions that do not accept deposits from its transfer list.In a circular dated Tuesday, December 5, 2023, the NIBSS issued this instruction to the banks with reference number NIBSS/BD/NI/PO/005/051223.
As a result, banks are required to unplug Switches, Super Agents, and Payment Solution Service Providers from the NIBSS Instant Payment Outwards System.
In the circular, the NIBSS informed the banks that it is against the Central Bank of Nigeria's (CBN) standards for electronic payment to identify non-deposit-taking financial institutions as beneficiaries.
The notification read, "This is to bring to your attention that the CBN Guidelines on Electronic Payment of Salaries, Pensions, Suppliers, and Taxes in Nigeria dated February 2014 are violated by listing non-deposit-taking financial institutions as beneficiary institutions on your NIP funds transfer channels, such as Switching Companies, Payment Solution Service Providers, and Super Agents."
The National Payment Infrastructure Company states that whereas switches, PSSPs, and SAs are able to send money out of the country as inflows to banks, they are not able to receive money in the same way.
The NIBSS also stated that this is the result of their licenses not allowing them to store client funds.
"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' provides additional regulatory advice in this regard," the statement read.
Please delist all Switches, PSSPs, and SAs from your NIP Outward Transfer channels only (not inwards) in light of the aforementioned.
The NIBSS further stated that operators must at the very least get a license from the CBN in order to be permitted to conduct business within Nigeria's payment ecosystem.
It mentioned the following licenses: Regulatory Sandbox, Payment Solution Services, Mobile Money Operations, and Switching and Processing.
According to the national payment infrastructure business, this is because, per CBN directives, only MMOs are permitted to keep consumer monies.