The Nigeria Inter-Bank Settlement System (NIBSS) has issued a directive instructing banks in the country to exclude all non-deposit-taking financial institutions from their NIP (NIBSS Instant Payment) fund transfer channels. The circular, dated December 5, 2023, with Ref: NIBSS/BD/NI/PO/005/051223, was sent to banks by the NIBSS.
The directive specifically mentions non-deposit-taking financial institutions, including Switching Companies, Payment Solution Service Providers (PSSPs), and Super Agents, cautioning that having them as beneficiary institutions on the NIP funds transfer channels is in violation of the Central Bank of Nigeria (CBN) guidelines on electronic payments.
NIBSS emphasized that while Switches, PSSPs, and Super Agents may process outward transfers as inflows to banks, they are not authorized to receive inflows as their licenses do not permit them to hold customers’ funds.
Several fintech platforms used by Nigerians, such as Opay, Palmpay, Carbon, and others, may be impacted by this directive.
The circular reads: “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 further states, “Another regulatory advice in this regard is 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. Consequent on the above, kindly delist all Switches, PSSPs, and SAs from your NIP Outward Transfer channels only (not inwards).”
