PAYMENTS SYSTEM MANAGEMENT DEPARTMENT Tel: 09 462 38300, 09 462 38346 e-mail: psmd a cbn gov ng website: www.cbn.gov.ng.

CENTRAL BANK OF NIGERIA Central Business District, Cadastral Zone AO P.M.B. 0187, Garki Abuja.

Psm/Cir/Gen/Cir/01/22 9Th December 2020

To: Circular to all Payment Service Providers. Banks and Other Financial Institutions.

NEW LICENCE CATEGORISATIONS FOR THE NIGERIAN PAYMENTS

System

The Central Bank of Nigeria (CBN) in line with its commitment to promote a strong and credible payment system has approved new licence categorisations for the payments system.

The new licensing framework, details of which are provided in Appendix 1. offers clarity for new and existing market participants given the significant evolution and innovation in the Nigerian payments system.

All payment service providers and other stakeholders are invited to note the following in this regard:

1. Payments system licensing has been streamlined according to permissible activities in four broad categories: a. Switching and Processing b. Mobile Money Operations (MMOs) c. Payment Solution Services (PSSs) d. Regulatory Sandbox 2. Only MMOs are permitted to hold customer funds. Companies with licences within any of the other categories are not permitted to hold customer funds.

Page 1 of 4 3. Companies seeking to combine activities under the Switching and MMO categories are only permitted to operate under a holding company structure with the subsidiary entities clearly delineated to prevent comingling.

4. Payments System companies in the PSS category may hold any of PSSP, PTSP and Super Agents licence or a combination of the licences thereof.

5. 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 Payments System Management Department 6. The object clauses in the Memorandum and Articles of Association of Payment Service Providers shall be limited to the permissible activities under their licensing authorizations.

6. Collaborations between licensed payment companies, banks and other financial institutions in respect of products and services are subject to CBN's prior approval.

7. All new licensing requests including those with Approvals-in-Principle are to comply with the new requirements immediately. Existing licensed payment companies are to comply with the new licensing requirements where applicable not later than end-June 2021.

All payment service providers and stakeholders in the payments system are required to ensure strict compliance with these requirements and all other payments system regulations.

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The CBN will continue to monitor developments in the payments system and issue guidance as may be appropriate.

Musa I. Jimoh Director, Payments System Management Department

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Appendix 1 Payments Service Providers Licensing Framework-

PERMISSIBLE ACTIVITIES AND MINIMUM CAPITAL REQUIREMENT
	Permissible Activities	Minimum Capital *
License category	Not Applicable
Regulatory Sandbox	As delermined in the Sandbox.
	The Regulatory Sandbox Category is aimed at
	stimulating innovation and deepening financial
	inclusion. To this end, the CBN shall review the
	products and solutions of applicants (licensed
	institutions,	fintechs,	innovators	and
	researchers) during its implementation.
	As permissible under Super Agents, PTSPs and	N250 million
Payment Solution Services (PSSs)	PSSPs
	Agent recruitment, management and other activities	N50 million
Super-Agent	as specified in the Regulatory Framework for
	Licensing Super Agents in Nigeria
Terminal	Service	Provider	POS Terminal deployment and services, POS	N100 million
Payment
(PTSP)	Terminal ownership, PTAD, Merchant/agent training
	and support	N100 million
Payment	Solutions Service Provider	Payment processing gateway and portais. Payment
	solution/application development, Merchant Service
(PSSP)	aggregation and collections.
Mobile Money Operation	E-Maney	issuing,	wallet	creation	and	N2 billion
	management, pool account management
	Activities as permissible under Super-Agent
	Switching,	Card	Processing,	Transaction	N2 billion
Switching and Processing	clearing and Settlement Agents Services, non-
	bank acquiring services.
	Activities as permissible under Super-Agent,
	PTSP and PSSP.

"Licensees will be required to manifain minimum capital equal to the higher of the anount stated in the table above or other captal as determined within the CBN's risk based supervisory framework.

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