ACCORDING to a circular from the Nigeria Interbank Settlement System Plc (NIBSS), banks in Nigeria have been directed to take down every non-deposit-taking financial institution from their NIP fund transfer channels.
Media reports state that the non-deposit-taking financial institutions Switching Companies (Switches), Payment Solution Service Providers (PSSPs), and Super Agents (SA), while the NIP fund transfer channels include USSD, mobile banking apps, POS, ATMs, plus web and internet platforms.
The circular released by NIBSS read in part: “listing non-deposit taking financial institutions such as switching companies (switches). Payment Solution Service Providers (PSSP) and Super Agents (SA) 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.”
The circular also clarified that while these financial institutions would be stopped from receiving inflows, they are allowed to process outflows as inflows to banks.
“For clarity, Switches, PSSPs, and SAs may process outward transfers as inflows to Banks but are not to receive inflows as their licenses do not permit to hold customers’ funds.”
This means that the enforcement of this policy will warrant that Fintechs and other payment service providers be taken down from the fund transfer channels of banks. Essentially, these platforms will be able to facilitate outward transfers to banks; however, they won’t be able to receive fund inflows.