OVERVIEW OF THE CENTRAL BANK OF NIGERIA LICENSING REGIME FOR FINTECH & PAYMENTS SYSTEM PROVIDERS

STARTING A BUSINESS IN NIGERIA
REQUIREMENTS FOR STARTING A BUSINESS IN NIGERIA
PROCEDURE FOR THE ESTABLISHMENT OF A COOPERATIVE SOCIETY IN NIGERIA
PROCEDURE FOR THE ESTABLISHMENT OF A COOPERATIVE SOCIETY IN NIGERIA
Show all

OVERVIEW OF THE CENTRAL BANK OF NIGERIA LICENSING REGIME FOR FINTECH & PAYMENTS SYSTEM PROVIDERS

CENTRAL BANK OF NIGERIA LICENSING REGIME FOR FINTECH & PAYMENT SYSTEM PROVIDERS

CENTRAL BANK OF NIGERIA LICENSING REGIME FOR FINTECH & PAYMENT SYSTEM PROVIDERS

PAYMENTS SERVICE PROVIDE LICENSE

CBN FINTECH LICENSE

In the most recent times, financial technology (otherwise known as FINTECH) companies have been evolving with numerous innovative products relating to payments services, which are gaining acceptance in Nigeria.

Consequently, the Central Bank of Nigeria(CBN) commenced a new licensing regime for all categories of payment service providers and financial technology companies in Nigeria.

This new licensing regime was birthed for the purpose of promoting financial inclusion and enhances access to financial services for low-income earners through leveraging on technology.

Essentially, the CBN licencing regime focuses on the aspect of the FINTECH relating to payment service providers (PSP). It does not cover other known aspects of FINTECH such as loan apps or cryptocurrency.

In accordance with the CBN’s regulation, there are 3 categories of PSP Licenses namely:

  • PSP SUPER LICENSE)
  • PSP STANDARD LICENSE
  • PSP BASIC LICENSE

The proposed licence regime also puts minimum shareholders’ funds for all categories of the payment service providers, which will be highlighted below.

PSP LICENSE REQUIREMENTS IN NIGERIA:

  1. PSP Super Licence

The existing licence types under the super category are:

  • Switching: The permissible activities under this licence type are; switching, processing, transaction clearing and settlement agents’ services.
  • Payment Service Solution Provider (PSSP): These are companies that make up the underlying e-payment infrastructures in Nigeria. The permissible activities under this licence type are; payment processing gateway and portals, payment solution/application development, merchant service aggregation.
  • Payment Terminal Service Provider (PTSP) such as electronic payment systems. The permissible activities under this licence type are POS terminal deployment and services, POS Terminal ownership, PTAD, Merchant/agent training and supports.
  • Non-Bank Merchant Acquiring super agency.

The permissible activities are agent recruitment and management services.

The minimum shareholder fund for the PSP Super License category is N5, 000,000,000.00 (Five Billion Naira).

The application fee for this category is N2, 000,000 (Two Million Naira) while the renewal fee is N1, 000,000 (One Million Naira). The licence is valid for three (3) years.

2. PSP Standard Licence

The existing licence types under the standard category are as follows:

  • Mobile Money Operators (MMO):  the permissible activities under this licence type are; E-Money issuers, agent recruitment and management, wallet creation and management, pool account management.
  • Super Agency: the permissible activities are agent recruitment and management services.
  • Non- banking Merchant Acquiring: the permissible activities under this licence type are merchant acquiring and settlements service, settlement agent’s services.

The minimum shareholder fund for the PSP Standard Licence category is N3, 000,000,000.00 (Three Billion Naira).

The application fee for this category is N1, 000,000 (One Million Naira) while the renewal fee is N500, 000.00 (Five Hundred Thousand Naira). The licence under this category is valid for three (3) years.

3. PSP Basic Licence

The existing licence types under the basic category are:

  • Super Agency: the permissible activities under this licence type are agent recruitment and management. The minimum shareholder funds for this activity type is N50,000,000 (Fifty Million Naira).
  • Payment Service Solution Providers (PSSP): the permissible activities include payment processing getaway and portals, payment solution/application development and merchant service aggregation. The minimum shareholder fund for this type of license is N100, 000,000 (One Hundred Million Naira).
  • Payment Terminal Service Providers: the permissible activities under this licence type are POS terminal deployment and services, POS terminal ownership, PTAD, merchant/agent training and supports. The minimum shareholder fund for this activity type is N100, 000,000 (One Hundred Million Naira).

The application fee for this category is N100, 000 (One Hundred Thousand Naira) while the renewal fee is N50, 000 (Fifty Thousand Naira). This licence category of payment service providers is valid for two (2) years.

In conclusion, the new CBN licencing regime was postulated to open up the financial service sector to more financial technology companies and provide a regulatory base for the growing industry.

Payments service providers are with this regime expected to leverage on mobile and digital services to enhance financial inclusion and stimulate economic activities in the provision of payment services.

By Resolution Law Firm.

Info: info@resolutionlawng.com

Tel| WhatsApp: +2348099223322

Comments are closed.

Chinese (Simplified)EnglishFrenchSpanish
Skip to toolbar