In a recent directive from the Nigeria Inter-Bank Settlement System (NIBSS), various financial entities including Deposit Money Banks, Merchant Banks, and others have been instructed to disconnect switches, Payment Solution Service Providers (PSSPs), and Super Agents from the NIBSS Instant Payment (NIP) Outwards System.
The directive, issued by Ngover Inyembe-Nwankwo, the Executive Director of Business Development at NIBSS, cites violations of the CBN Guidelines on Electronic Payment of Salaries, Pensions, Suppliers, and Taxes in Nigeria from February 2014.
The instruction emphasised that entities such as Switches, PSSPs, and Super Agents may process outward transfers as inflows to banks but are not permitted to receive inflows as their licenses don’t allow them to hold customers’ funds.
Furthermore, the directive refers to a circular from May 2018 outlining the permissible services and products of PSSP operations in Nigeria.
This directive might impact non-deposit taking financial institutions operating in Nigeria, particularly payment service providers like Opay, and others that act as Super Agents and PSSPs. While they may process outward transfers, this directive limits their ability to receive funds directly, in compliance with existing regulations.
The move appears to tighten regulatory oversight, emphasizing adherence to guidelines and restrictions on the handling of customer funds by these financial entities.
This directive signals a need for these entities to promptly comply by delisting Switches, PSSPs, and Super Agents from their NIP Outward Transfer channels.
Read full release below.
In what looked like the manifestation of the directive, Nigerians have started reacting to the development.
“Went to the bank to do some transactions yesterday and was told that they no longer do transfers to OPay, in fact the banker told me OPay is not a bank.
“Just maybe, this might be the reason,” @BelemaMhart wrote on his X handle.