The Central Bank of Nigeria (CBN) has unveiled plans to undergo a comprehensive review of its licensing framework for payment services, signaling the formulation of a new regulatory and compliance structure for the sector. CBN Governor, Olayemi Cardoso, disclosed this development during the recent annual dinner of the Chartered Institute of Bankers of Nigeria in Lagos.
Cardoso emphasized the vital role of technology in delivering financial services and promoting financial inclusion. However, he expressed the CBN’s apprehensions about recent developments within the payment services domain. Concerns were raised regarding the utilization of technology and its alignment with the existing licensing and regulatory framework.
Addressing these issues, Cardoso noted that certain licensees were operating beyond the approved activities, violating prescribed boundaries. He stressed that any intentional or unintended non-compliance would be met with sanctions, underscoring the operators’ responsibility to ensure alignment with their licensed activities. In response to these challenges, the CBN is set to conduct a comprehensive review of the payment services licensing framework.
Simultaneously, Cardoso outlined plans for extensive consultations to craft a new regulatory and compliance framework suitable for the rapidly evolving, technology-driven payment services sector. Currently, payment service providers operate under various licenses, including Payment Service Provider License, Payment Terminal Service Provider License, Mobile Money Operator License, Switching and Processing License, and Payment Solution Service Provider License.
In a circular dated December 9, 2020, the CBN introduced new license categorizations for the payments system, streamlining permissible activities to switching and processing, mobile money operations, payment solution services, and regulatory sandbox.
Cardoso also underscored the essential role of fintech in Nigeria’s economic aspirations, aiming for a GDP target of $1 trillion and improved capital inflows. He highlighted sectors such as agri-processing, oil & gas, manufacturing, solid minerals, fintech, information technology, real estate construction, and infrastructure as pivotal for attracting significant capital investments. Cardoso emphasized that as these sectors expand, opportunities will abound for both existing players and new entrants willing to strategically navigate the expanding economic landscape.