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  1. What are the sources of payments law in your jurisdiction?

The primary laws that regulate payments in Nigeria are the Central Bank of Nigeria (Establishment) Act 2007 (CBN Act) and the Banks and Other Financial Institutions Act (BOFIA). These laws aid the Central Bank of Nigeria (CBN) in efficiently exercising its oversight function in the payments sector. Sections 33 and 57 of the BOFIA (as amended) and Section 51 of the CBN Act, empowered the CBN to make rules, regulations and guidelines with regard to monetary policy and control of the banking industry (the Regulations). In exercise of its oversight functions, the CBN has released several Regulations that are core to the Nigerian payment ecosystem, which includes, but are not limited to the below:

  • Circular on New License Requirements for the Payments System, 2021;
  • Guidelines on International Money Transfer Services in Nigeria, 2014;
  • Regulatory Framework for Licensing SuperAgents in Nigeria, 2015;
  • Guidelines on Mobile Money Services in Nigeria, 2015;
  • Guidelines on Transactions Switching in Nigeria, 2016;
  • Guidelines on Operations of Electronic Payment Channels, 2016.
  • Guidelines on Licensing and Regulation of Payment Service Banks in Nigeria, 2018;
  • Regulatory Framework for Use of Unstructured Supplementary Service Data (USSD) Financial Services in Nigeria, 2018;
  • Regulation on Electronic Payments and Collections for Public and Private Sectors in Nigeria 2019;
  • Nigerian Payments System Risk and Information Security Management Framework;
  • Risk-Based Cyber-Security Framework and Guidelines for Deposit Money Banks and Payment Service Providers, 2019;
  • The New Licensing Categories for The Nigerian Payment System, 2020; and
  • Framework for Quick Response (QR) Code Payments in Nigeria, 2021; amongst others
  1. Can payment services be provided by non-banks, and if so on what conditions?

In the Nigerian financial ecosystem, entities other than licensed banks can provide financial services in Nigeria. These entities are referred to as the “Other Financial Institutions” (OFIs). The BOFIA defines OFIs to include Payment Service Providers licensed by the CBN to provide payment service.

The CBN’s New License Categorisation for Nigerian Payment Service Providers, 2020 has streamlined the categories of payment services based on permissible activities. These categories include; (a) Switching and Processing; (b) Payment Solution Services (which players include persons licensed to act as Super Agents, Payment Terminal Service Providers (PTSPs), and Payment Solutions Service Providers (PSSPs)); (c) Mobile Money Operations (MMOs); and (d) Payment Service Banks (PSBs):

On 24th May 2021, the CBN issued a Circular on New License Requirements for the Payments System (Circular). The Circular sets out the requirements for persons who intend to be licensed by the CBN as a payment service provider in any of the above capacity. For example to be licensed as a Switching and Processing Company, the Circular provides that the Company must have a minimum share capital of N2,000,000,000 (Two Billion Naira), amongst other requirements.

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