On 9 December 2020, the Central Bank of Nigeria (CBN) issued a circular on the New Licence Categorisations for the Nigerian Payments System (the “New Licence Categorisations”).
Key Provisions of the New Licence Categorisations
Streamlining of Permissible Payment Systems Activities: The New Licence Categorisations streamlines the permissible activities for payment systems licensing into the following four (4) categories:
- Switching and Processing: Switching and Processing companies are permitted to provide services such as switching, card processing, transaction clearing, and settlement agents’ services as well as non-bank acquiring services.
- Mobile Money Operations: Mobile Money Operators (MMOs) are licensed by the CBN to provide mobile money services in Nigeria. Banks or other licensed corporate organisations are eligible to operate as MMOs. MMOs engage in the issuance of electronic money, creation, and management of wallets, and pool account management, etc. By virtue of the New Licence Categorisations, only MMOs are permitted to hold customer funds in the Nigeria payments system framework.