CBN Releases Framework for Non-Bank Acquiring

Central Bank of Nigeria (CBN) has  released regulatory framework guiding the operations of non-bank acquiring in the country.

Mr. Godwin Emefiele, CBN governor

A circular issued by Musa Jimoh, director, Payment System Management department, CBN, to all banks, payment service providers  and other financial institutions compelled non-bank merchant acquirers to meet the minimum standards of operations, as approved by the CBN.

The CBN said it had issued the framework in furtherance of its mandate to promote a sound financial system and facilitate the development of electronic payment systems in Nigeria.

The framework 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.

“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 refutations, as the CBN continues to monitor developments and issue guidance as may be appropriate”, stated.

According to the framework, only licensed switching and processing companies, other than acquiring banks, shall be allowed to process and settle transactions on behalf of merchants in Nigeria. With the new framework, non-Bank Acquirers will only be approved by the CBN as “it deems necessary, from time to time”.

It further noted: “Non-bank acquirers shall have in place adequate policies for the management of risks associated with the acquiring services. Furthermore, necessary agreements shall be executed with parties to the acquiring services.