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Payment system operators get capital requirements



The Central Bank of Nigeria (CBN) has issued operating guidelines for businesses and payment service providers.

In a circular yesterday, the apex bank specified the minimum capital base for the different categories of players operating in the ecosystem.


According to the document, the minimum capital for mobile money and switching/processing operators is N2 billion. Payment terminal solution service providers (PTSP) and payment solution service providers (PSSP) are to possess nothing less than N100 million.

To operate as a player or super agent, a company needs N250 million or N50 million as capital requirements.

The document also spelled out the activities permissible under each category, which CBN said would apply to “new and existing market participants.”

Signed by Director, Payment System Management Department, Musa Jimoh, the circular categorised the providers into four: switching and processing; mobile money operations (MMOs); payment solution services and regulatory sandbox.


It warned that only companies registered as MMO “are permitted to hold customer funds.”

The directive clarified that “companies seeking to combine activities under the switching and MMO categories are only permitted under a holding company structure with the subsidiary entities clearly delineated to prevent commingling.”

Under the new regulatory template, firms (and there are quite a number of them in the fast-growing industry) that currently combine activities would hand off one or float a holding company.

The regulator also observed: “Payment system companies in the PSS category may hold any of PSSP, PTSP and super-agent licence or a combination of the licenses thereof.”


“All licensed payment service providers in any of the categories covered by this framework holding or seeking any other CBN issued licences are required to obtain a no-objection from the Payment System Management Department.”

It warned that the object clauses in the memorandum and article of association of payment service providers would be limited to the “permissible activities under their licensing authorisation.”

Also, the circular insisted that collaboration between payment service providers, money deposit banks and other financial institutions shall as regards service and product development shall henceforth be subjected to “CBN’s prior approval”.

“All payment service providers and stakeholders in the payment system are required to ensure strict compliance with these requirements and all other payment system regulations,” CBN directed.

The purpose of the guideline, it added, was to ensure a “strong and credible payment system”.

Nigeria is currently on catch-up with the rest of the world, including some of Africa’s countries like Kenya, in the adoption of smart payment solutions.

According to information from the Nigeria Interbank Settlement System, the country has recorded unparalleled growth in smart payment in the past two years with the innovation gaining more traction by the day.

Stakeholders have suggested a cautious regulation of financial technology with the fears that overregulation may stifle innovation and speed – the wheels that drive the industry.


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