Banks in Nigeria have received instructions from the Nigeria Interbank Settlement System Plc to remove all non-deposit-taking financial institutions from their NIP fund transfer channels.
Non-deposit-taking financial institutions encompass switching companies, payment solution service providers, and super agents.
The NIP fund transfer channels comprise USSD, mobile banking apps, POS, ATMs, as well as web and internet platforms.
Non deposit financial institutions include, Kuda Bank, Palmplay, Piggyvest, Opay, Paga, Fair money, Palm credit, etc.
According to the circular released by NIBSS, “listing non-deposit taking financial institutions such as switching companies (switches). Payment Solution Service Providers (PSSP), and Super Agents (SA) as beneficiary institutions on your NIP funds transfer channels contravenes the CBN Guidelines on Electronic Payment of Salaries, Pensions, Suppliers and Taxes in Nigeria dated February 2014.”
The circular specified that although these financial institutions won’t receive incoming funds, they are permitted to facilitate outward transactions as incoming funds to banks.
“For clarity, Switches, PSSPs, and SAs may process outward transfers as inflows to Banks but are not to receive inflows as their licenses do not permit to hold customers’ funds.”
