It has emerged that the Central Bank of Nigeria (CBN) revoked the licenses of seven (7) payment service providers and one (1) switch service provider due to their inability to meet up with their statutory obligations and conditions, wherein they were formed. This was contained in an Official Gazette of the Federal Republic of Nigeria made available by the apex bank.
Although the statutory obligations that the affected firms failed to fulfil were not mentioned, however, the recent revocation might be connected to CBN’s renewed drive to strengthen and ensure a credible payment system in Nigeria amidst the new wave of Fintechs in the country offering varying but often nuanced services. It could be recalled that the CBN had approved new license categorizations for the Nigerian payment system.
In withdrawing the licenses, the apex bank said it did so in exercise of the powers conferred on it under Sections 60 and 62 of BOFIA, CAP B3, Laws of the Federation of Nigeria, 2004 to revoke the licenses of the payment service providers listed in Schedule I and the switch licence of payment services providers listed in Schedule II attached hereto. Central Bank sources say that the affected institutions will for a period of six months consecutively, cease to carry on in Nigeria, the type of business for which their licenses were granted.
The affected institutions are categorized into two schedules, with the first comprising of the 7 PSPs whose licenses were revoked, while the other comprised of a PSP whose Switch license was revoked. The seven affected payment service providers (PSPs) whose licenses were revoked as contained in Schedule I are; Easifuel Limited, Transaction Processing System (TPS), Grand Towers Limited, Paymaster Limited, E-Revenue Gateway Limited, Eartholeum Network Limited and Globasure Limited. While the sole payment service provider whose switch license was revoked is; 3Line Card Management Limited.
It is also pertinent to state that the affected firms are not barred from conducting businesses in Nigeria, however, their licenses to operate in their previous capacities as PSPs and Switch operator is what is revoked for the time being. According to an earlier modified guideline released by CBN two weeks ago, the minimum capital requirements to operate in Payment Service Providing and Switching/Processing capacities are N100 million and N2 billion respectively.
Some of the services provided by a Payment Service Provider and Switch operators include; POS terminal deployment and services, PTAD, Merchant/agent training and support, switching, card processing, transactions clearing and settlement agents etc.