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CBN Issues Regulatory Framework For Non-Bank Merchant Acquiring In Nigeria

The Central Bank of Nigeria (CBN), has issued the Regulatory Framework for Non-Bank Acquiring in Nigeria in furtherance of its monetary measures to promote a sound financial system and facilitate the development of electronic payment systems in the country.

The apex bank’s Director, Payments System Management Department, Musa Jimoh, in the Notice issued on the framework, indicated that “it sets out the rules for the operation of Non-Bank Merchant Acquiring in Nigeria as a regulated service and provides minimum standards and requirements for the operations of Non-Bank Acquiring in Nigeria, including the rights and obligations of the parties involved in the process.

In addition, it also compels Non-Bank Merchant Acquirers to meet the minimum standards of operations, as approved by the Bank.

The Notice further clarified: “This Regulatory Framework shall guide activities of the participants in the provision of Non-Bank Acquiring services in Nigeria.

“All stakeholders are required to ensure strict compliance with the framework and all other regulations, as the CBN continues to monitor developments and issue guidance as may be appropriate”, it added.

Specifically, the objectives of the framework are: to establish Non-Bank Acquiring as a regulated service in Nigeria and provide minimum standards and requirements for the operations of Non-Bank Acquiring in Nigeria.

According to the framework’s Section 1.2 which guides participants in Non-Bank Acquiring in Nigeria, the participants are Non-Bank Acquirer; Settlement Bank/Sponsor Bank; Merchant’s Deposit Money Bank; Card Schemes; Other Payment Schemes; and Nigeria Central Switch (NCS).

On the roles and responsibilities of Non-Bank Acquirers, the apex bank stated that it shall approve non-Bank Acquirers, as it deems necessary, from time to time and that only Licensed Switching and Processing Companies, other than Acquiring Banks, shall be allowed to process and settle transactions on behalf of merchants in Nigeria.

For settlement Bank/Sponsor Bank, the framework provides that the role of the Settlement/Sponsor Bank shall be as prescribed in the Guidelines for the Operations of Electronic Payment Channels in Nigeria and other relevant regulations.

It also states that the role of the Merchant’s Deposit Money Bank shall be as prescribed in the Guidelines for the Operations of Electronic Payment Channels in Nigeria and other relevant regulations.

This is even as the apex bank, under the new regulatory framework, stated that the role of the Payment Schemes/NCS shall be as prescribed in the Guidelines for the Operations of Electronic Payment Channels in Nigeria and other relevant regulations.

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