Nigeria’s Interbank Settlement System Plc (NIBSS) has instructed banks in the country to remove non-deposit-taking financial institutions, including switching companies, payment solution service providers, and super agents such as Opay, Paystack, moniepoint from their NIP fund transfer channels.
This directive encompasses various channels such as USSD, mobile banking apps, POS, ATMs, as well as web and internet platforms.
According to the circular issued by NIBSS, including these non-deposit-taking financial institutions on NIP funds transfer channels violates the CBN Guidelines on Electronic Payment of Salaries, Pensions, Suppliers, and Taxes in Nigeria from February 2014. The circular clarified that while these entities are prohibited from receiving inflows, they are allowed to process outflows as inflows to banks.
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What to Know About NIBSS Policy
— theZikora. (@zikorx) December 6, 2023
In practical terms, Fintechs lacking banking licenses will be removed from banks’ fund transfer channels due to the enforcement of this policy. Despite being able to facilitate outward transfers to banks, these platforms won’t be permitted to receive fund inflows. It is anticipated that affected Fintechs will pursue banking licenses to continue their operations.
This policy is expected to impact small business owners significantly, as they are the primary users of these Fintech platforms. Nevertheless, it is also anticipated that Fintechs will expedite the acquisition of banking licenses to avert business disruptions.
