Opay, Kuda, Palmpay, Other Non-Deposit Financial Institutions To Be Disconnected From Fund Transfer Channels

Banks have received a directive from the Nigeria Inter-Bank Settlement System (NIBSS) to disconnect Switches, Payment Solution Service Providers (PSSPs), and Super Agents from the NIBSS Instant Payment Outwards System.

VerseNews reports that according to the circular, listing non-deposit-taking financial institutions as beneficiaries on the NIP funds transfer channels contradicts the Central Bank of Nigeria’s guidelines on electronic payments.

The NIBSS instructed banks to delist Switches, PSSPs, and Super Agents from the NIP Outward Transfer channels while noting that their licenses do not permit them to hold customers’ funds.

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.”

“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).”

The implication of this policy when enforced means that affected platforms will be able to facilitate outward transfers to banks, however, they won’t be able to receive fund inflows.

See statement below: