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CBN Releases Guidelines/Framework For Mobile Money Services

Barely three days after it released a new regulatory framework guiding the operations of for Payment Service Banks (PSBs), the Central Bank of Nigeria (CBN) at the weekend released a new Regulatory Guidelines and Framework for Mobile Money Services (MMS) in the country.

The apex bank stated that the introduction of mobile telephony in Nigeria and its rapid growth and adoption had necessitated the issuance of the new MMS framework as it will create an enabling environment for the orderly introduction and management of mobile money services in Nigeria.

Specifically, the framework defines the regulatory environment as a policy path towards achieving availability, acceptance and usage of mobile payment services.”

This is even as the CBN stated that the objectives of the guidelines were to ensure a structured and orderly development of mobile money services in Nigeria, with a clear definition of various participants and their expected roles and responsibilities; specification of the minimum technical and business requirements for the various participants recognized for the mobile money services industry in Nigeria; and promote safety and effectiveness of mobile money services and thereby enhance user confidence in the services.

The Guidelines on Mobile Money Services stated that the Mobile Money Operators (MMOs)shall not carry out the following activities: Grant any form of loans, advances and guarantees (directly or indirectly); and Accept foreign currency deposits; Deal in the foreign exchange market except as prescribed in Section 4.1 (ii & iii) of the extant Guidelines for Licensing and Regulation of Payment Service Banks in Nigeria; and Insurance underwriting.

In addition, the MMOs were disallowed from Accepting any closed scheme electronic value (e.g. airtime) as a form of deposit or payment; Establishing any subsidiary; Undertaking any other transaction which is not prescribed by these Guidelines; and any other activities that may be prohibited by the CBN.

On interest distribution on savings wallet, Section 10.1.3 of the Guidelines stated: “Fees and charges for the management of the investment shall not be more than 10 per cent of interest income on savings wallet funds investment; Where an MMO operates a savings wallet, i.e., a wallet earning interest, it shall expressly inform subscribers of the following:

“The minimum balance on the savings wallet that qualifies to earn interest; The allowable number of withdrawals to be entitled to earn interest; The minimum savings period to earn interest; The applicable balance that would earn interest;

“The procedure for determining interest amount distributable to subscribers should stipulate the minimum percentage of interest income to be distributed to subscribers and the proportion to be retained by the MMO, if applicable; The applications of section 10.1.3 (b) (i) to (v) in distributing interest shall be automated.

The section further stated: “On no account whatsoever, shall a Mobile Money savings wallet account holder suffer diminution in the principal sum on his/her wallet as a result of fees or charges; Deposit Money Banks serving as settlement banks are prohibited from off-setting any other transactions of the MMO, including the transaction wallet pool accounts, against the savings wallet principal pool accounts and savings wallets interest pool account; and MMOs shall comply with the minimum disclosure requirements on the financial statements as stipulated by the Bank”

Earlier in its provisions, Section 10.1.2 of the guidelines stated: ”Funds on saving wallets shall be invested in only the Nigerian Treasury Bills (NTB); MMOs shall be treated as mandate customers of CBN for NTB subscription through the CBN NTB window, and MMOs shall have a process to determine appropriate cash balance on its Savings Wallet Principal Pool Account that will meet its savings wallets customers’ withdrawal requirements at every point in time.”

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