CBN Issues New Capital Requirement For Payment Service Providers

CBN Funds 95 Health Projects With N97.8bn

The Central Bank of Nigeria (CBN) on Thursday issued a new capital requirement and licence categorisation for payment service providers.

The CBN, in a circular posted on its website which was signed by its Director, Payment System Management Department, CBN, Mr. Musa Jimoh, put the new capital requirement for mobile money operations as well as switching and processing companies at ₦2 billion respectively. The circular was dated December 9, 2020.

The minimum capital requirement Payment Solution Services (PSS) was pegged at ₦250 million while that of super-agents is now ₦50 million.

Also, Payment Terminal Service Providers (PTSP) and Payment Solutions Service Providers (PSSP) are required to have ₦100 million minimum capital requirement respectively.

The CBN said the move was in line with its commitment to promote a strong and credible payment system.

“The new licensing framework offers clarity for new and existing market participants given the significant evolution and innovation in the Nigerian payment system,” it added.

READ ALSO: BREAKING: Sylvanus Nsofor, Nigeria’s Ambassador To US Is Dead

According to the CBN, payment system licensing has been streamlined into four broad categories. These it listed to include switching and processing; Mobile Money Operations (MMOs); PSS and Regulatory Sandbox.

It said: “Only MMOs are permitted to hold customer funds. Companies with licences within any of the other categories are not permitted to hold customers’ fund. Companies seeking to combine activities under switching and MMO categories are strongly permitted to operate under a holding company structure with the subsidiary entities delineated to prevent co-mingling.

“Payment system companies in the PSS category may hold any of PSSP, PTSP and super agent licence or a combination of the licences thereof. All licensed payment service providers in any of the categories covered by this framework holding or seeking any other CBN issued licences are required to obtain a no-objection from the Payment System Management Department.

“The object clauses in the Memorandum and Articles of Association of Payment Service Providers shall be limited to the permissible activities under their licensing authorisations. Collaboration between licensed payment companies, banks and other financial institutions in respect of products and services are subject to CBN’s prior approval.

“All new licensing requests including those with approval-in-principle are to comply with the new requirements immediately. Existing licensed payment companies are to comply with the new licensing requirements where applicable not later than the end of June 2021.”

About Author

Aina Adepeju is a Mass Communication graduate. She loves photography, she is a Member of the Nigerian Institute of Public Relations (NIPR) and Advertising Practitioners Council of Nigeria (APCON). Adepeju can be reached via [email protected]

Comment here

This site uses Akismet to reduce spam. Learn how your comment data is processed.