As per a recent directive from the Nigeria Interbank Settlement System Plc (NIBSS), Nigerian banks have been instructed to exclude non-deposit-taking financial institutions from their NIP (NIBSS Instant Payments) fund transfer channels. These non-deposit-taking entities encompass switching companies, payment solution service providers, and super agents. The affected NIP fund transfer channels include USSD, mobile banking apps, POS, ATMs, as well as web and internet platforms.
The NIBSS circular highlighted that featuring non-deposit-taking financial institutions like switching companies, Payment Solution Service Providers (PSSP), and Super Agents (SA) as beneficiaries on NIP funds transfer channels violates the Central Bank of Nigeria's (CBN) guidelines on electronic payment of salaries, pensions, suppliers, and taxes, dating back to February 2014.
The circular further clarified that while these financial institutions would no longer be able to receive inflows, they are permitted to process outflows as inflows to banks. In specific terms, switches, PSSPs, and SAs can facilitate outward transfers as inflows to banks but are not authorized to receive inflows due to restrictions imposed by their licenses, which do not permit them to hold customers' funds.
This enforcement implies that Fintechs lacking banking licenses will be removed from banks' fund transfer channels. Despite this, these platforms will still have the capability to execute outward transfers to banks but won't be able to receive fund inflows. It is anticipated that affected Fintechs will pursue acquiring banking licenses to enable them to hold funds. This policy is foreseen to impact small business owners significantly, as they are primary users of these Fintech platforms. However, it is also expected that affected Fintechs will promptly seek banking licenses to safeguard their businesses from potential collapse.
 Directs Removal of Non-Deposit Financial Institutions from Fund Transfer Channels){kind=link}
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