Circular on Statements of Payment Finality for the Nigerian Payments Schemes — CBN — NG

CENTRAL BANK OF NIGERIA
Central Business District
P.M.B. 0187,
Garki, Abuja.
+234 - 0946238445

BANKING AND PAYMENTS SYSTEM DEPARTMENT

BPS/PSV/DIR/GEN/CIR/01/001

JULY 10TH, 2017

To: All Deposit Money Banks and Other Payments System Participants

CIRCULAR ON STATEMENTS OF PAYMENT FINALITY FOR THE NIGERIAN PAYMENTS SCHEMES

In line with the overall objective of the Nigerian Payments System Vision 2020 (PSV2020) project aimed at creating an electronic payments infrastructure that is nationally utilized and internationally recognized, the Central Bank of Nigeria hereby issue the statements of payment finality for the four payment schemes (RTGS, Card, Mobile and ACH, Cheque & Instant Payments) in Nigeria.

This defines the specific point at which payments are deemed to be final and irrevocable and to ensure that no payment system would invoke the principle of ‘unwind’”.

GENERAL NOTE:

a. The definition for Payment Finality for each payment scheme is without prejudice to the dispute resolution mechanism, in accordance with the rules and regulations governing the respective schemes.

b. The statements and operational implications will be incorporated into the respective scheme's rules.

RTGS PAYMENTS SCHEME

VARIOUS TYPES OF TRANSFER	POINT OF PAYMENT FINALITY
Inter-Bank Funds Transfer	At the point when the sending bank's account is debited and the receiving bank's account is credited, payment/settlement is final and cannot be revoked
Third-Party (Customer) Funds Transfer	At the point when the sending bank's account is debited and the receiving bank's account is credited, payment/settlement is final and cannot be revoked
Net Settlement	At the point when the accounts of banks are debited/credited, payment/settlement is final and cannot be revoked

Settlement & Payment Finality happen at the same time on the RTGS system

MOBILE PAYMENTS SCHEME

TRANSACTION WITHIN THE MOBILE PAYMENTS SCHEME	POINT OF PAYMENT FINALITY
Mobile Money Operator (MMO) to MMO / Bank Transactions	This is at the point when the switch successfully transmits the authorization message from the sending MMO to the beneficiary MMO / Bank.
International Remittance to MMO	Payment is FINAL, when the MMO system credits the customer's wallet.
Over the Counter/ Walk-in Transactions	When NIBSS confirms and processes the transaction and sends notifications to both the sending and beneficiary MMOs.
Online Payments	A confirmation message from the Switch to the beneficiary bank confers finality of transactions.

On the Mobile Payments Scheme, once payment is confirmed, settlement must be guaranteed.

ACH, CHEQUE & INSTANT PAYMENTS SCHEME

VARIOUS TYPES OF TRANSACTIONS	POINT OF PAYMENT FINALITY EVIDENCE	POINT OF PAYMENT FINALITY
CHEQUE AND ACH DEBIT	Payment Finality occurs at 10pm on day T+1 for all cleared instruments	Clearing Session Closes (Note: A returned cheque or ACH debit will ALWAYS result as a separate payment instruction but is both a debit and reversing credit to the payer's account)
ACH CREDIT	Payment Finality occurs when Receiving Bank credits beneficiary's account	Clearing Session Closes (Note: A returned payment will ALWAYS result as a separate payment instruction)
INSTANT PAYMENT	Payment is considered final and irrevocable when Presenting Bank communicates transaction status to the customer who initiated the transfer/payment request	At the point when IP Switch sends authorisation response to presenting bank

CARD PAYMENTS SCHEME

TRANSACTION WITHIN THE CARD SCHEME	POINT OF PAYMENT FINALITY
P.O.S Purchases (and other Card present transactions)	Payment is considered final and irrevocable when the issuer AUTHORISES the transaction. At this point, the transaction cannot be unwound and settlement MUST occur.
Electronic Bill Payments (and other Card NOT present transactions)	Payment is considered final and irrevocable when the issuer AUTHORISES the transaction. At this point, the transaction cannot be unwound and settlement MUST occur.

Thank you for your usual cooperation

“Dipo Fatokun
Director, Banking & Payments System Department