Nigeria’s Central Bank introduces Payment System Banks

In view of making efforts to promoting the financial state and improving access to all round financial services, the Central Bank of Nigeria (CBN) recently introduced the payment system banks. Before now, It was revealed that the National Financial Inclusion Strategy (NFIS) aims to make sure that by the year 2020, more than 80% of bankable individuals should have easy access to financial services.

This will serve as an innovative for the financial services sector and will be of advantage to low income earners and unbanked organizations especially those in the rural areas.

Earlier in October 2018, the CBN released the application guidelines for licensing and regulations of Payment Service Banks in Nigeria. Those eligible to apply for the Payment service bank license includes Banking Agents, Telecommunications companies, Retail chains and Mobile Money Operators. Any of these organizations interested in obtaining the Payment Service Banks license must have a minimum paid up capital of N5 billion or another other amount as requested by the Central Bank. They are also expected to pay a non-refundable application fee of N500,000 and a non-refundable licensing fee of N2 Million.

The Payment service banks shall also be in accordance and comply with the Money Laundering (Prohibition)  act 2011, the Terrorism Prevention Act 2011, the CBN AML/CFT Regulations for Banks and other financial institutions 2013 and other existing laws and regulations on Know Your Customer (KYC) requirements as implemented by the Central Bank of Nigeria. They are to adopt risk-based approach in all their dealings and there should be steady monitoring of all accounts and account transactions. All suspicious financial transactions are to be reported to due agencies.

While speaking concerning this at the Business day financial inclusion conference in Lagos, the head of the financial inclusion secretariat at the Central Bank, Mr. Temitope Shogaolu said;

“As regulators, we are looking to provide an adequate playing field for interested organizations to change the current situation on financial inclusion,”

“Fast consumer goods corporations and other interested organizations are qualified to apply for a license,”

“What we want is everyone that has interest and is capable of driving financial inclusion ahead of 2020 which is when we are expecting to accomplish the national target of 20 percent exclusion,” He also added.

This new development will also bring about many foreign direct investments (FDIs) in the country. Top telecommunication companies in Nigeria like MTN, Airtel and the rest have even started making plans in order to apply for the payment service banking licence