NIBSS to banks: Delist non-deposit providers from online payment services

Nigeria Inter-Bank Settlement System (NIBSS) has directed banks to delist non-deposit payment service providers from the instant payment (NIP) outward transfer channels.

This was disclosed in a notice dated December 7, 2023, and signed by Ngover Ihyembe-Nwankwo, executive director, business development, NIBSS.

According to the circular, the directive seeks to address regulatory concerns regarding non-deposit-taking financial institutions (NDTFIs) holding customer funds.

The NIBSS specifically instructs banks to delist all financial institutions which fall under these categories from their NIP outward transfer channels only, adding that the restriction does not apply to inward transfers.

“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,” the circular said.

“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).”

Meanwhile, reports had mentioned fintechs such as Kuda, Opay and PiggyVest which was outrightly disputed.

FINTECHS ASSURE CUSTOMERS OF NOT BEING AFFECTED

In different X posts on Thursday, fintech founders had debunked reports of being affected by the announcement.

Tayo Ovioso, chief executive officer (CEO), Paga, said his firm was not part of the delisting.

“My attention was drawn to articles wrongly stating Paga is affected by the notice to remove PSSPs from receiving transfers,” he posted. 

“Paga is a licensed Mobile Money Operator, which allows us to hold deposits, unlike PSSPs. As you can see from the list, Paga is not on there.”

Similarly, Opay assured customers that the firm is also not included in the restriction.

“We wish to state that OPay is not affected by the recent circular published by NIBSS,”OPay said.

“The focus is on Payment Service Solution Providers, Switches and Super Agents. 

“OPay is a Mobile Money Operator (MMO) licensed by the CBN and insured by the NDIC. 

“Your funds are safe and secure with OPay.”

Piggyvest also said the firm is not affected by the recent NIBSS circular.

“Please disregard the misinformation. All Piggyvest virtual account numbers are provided by our licensed partners and do not fall into any of the listed categories,” Piggyvest said.

Also, Kuda said it isn’t affected, assuring customers that their money is safe.

The fintech said as a licensed microfinance bank, they do not belong to any of the groups mentioned.