Directive to Disconnect Switches, Payment Solution Service Providers (PSSPs) and Super Agents from NIBSS Instant Payment (NIP) Outwards System

Notification to Disconnect Switches, Payment Solution Service Providers (PSSPs) and Super Agents from NIBSS Instant Payment (NIP) Outwards System

Ref: NIBSS/BD/NI/PO/005/051223

December 5, 2023

To: All Deposit Money Banks, Merchant Banks, Switches, Mobile Money Operators, Payment Service Banks, Microfinance Banks, Mortgage Banks, Payment Solution Service Providers, Super Agents, and Others.

Dear Sir/Ma,

Notification to Disconnect Switches, Payment Solution Service Providers (PSSPs) and Super Agents from NIBSS Instant Payment (NIP) Outwards System

We hope that this message meets you well.

This is to bring to your attention that listing non-deposit taking financial institutions such as Switching Companies (Switches), Payment Solution Service Providers (PSSPs) 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. 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 them to hold customers’ funds.

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).

Thank you in anticipation of your prompt action.

Circular FAQ

What does this communication mean?

This communication was sent requesting all Financial Institutions on the NIBSS Instant Payment Platform to list only licensed deposit-taking Financial Institutions as Beneficiary Institutions on Instant Payment Channels in compliance with the CBN Guidelines on Electronic Payment of Salaries, Pensions, Suppliers and Taxes in Nigeria dated February 2014.

GUIDELINES ON ELECTRONIC PAYMENT OF SALARIES, PENSIONS, SUPPLIERS AND TAXES IN NIGERIA

What does this mean for the users of the Instant Payment Services?

This will mean that only institutions duly licensed by the CBN to hold depositors’ funds, will be listed as Beneficiary Institutions on the instant payment platforms of Banks for funds transfers. This ensures that only institutions that have met the necessary due diligence standards and requirements, are able to receive and hold depositors’ funds.

How does this communication impact the processing of outward transfers by Financial Institutions?

For clarity, non-deposit taking Financial Institutions such as Switches, Super Agents and Payment Solution Service Providers (PSSPs) can continue to utilise NIBSS NIP services for outward transfers to process payments permitted under their licenses e.g. Salaries, Taxes, Pensions, but they cannot utilise the NIP services to receive inward transfers directly from account holders.

Where can I find the list of CBN Licensed Financial Institutions Categories?

Please visit the CBN website via the link:
https://www.cbn.gov.ng/Paymentsystem/PSPs.asp

Which of the Banks channels will be impacted by this action?

Instant Payments channels such as Branch Transfer Services, Mobile Apps, Online Banking channels, ATMs, USSD channels etc. It requires the removal of Switches, Super Agents, Payment Solution Service Providers (PSSPs) etc from the beneficiary institutions listed on the NIP drop list.

Download Circular

Download Circular FAQ