The New Central Bank of Nigeria Rule Strikes The Fintech Community

The New Central Bank of Nigeria Rule Strikes The Fintech Community

A Federal High Court sitting in Asaba Nigeria has ruled that it is illegal for banks to charge depositors N50 stamp duty: “… there was no express provision in the Stamp Duties Act or any law authorizing the deduction or imposing any obligation to deduct and remit N50 as stamp duty on teller deposits or electronic transfers of monies…” I hope the CBN and banks do not appeal! Lol.

But the CBN of course has more ammunition in its pencils and biros: the apex bank has approved new licensing for different categories of payment  companies in Nigeria, Samuel Nwite reports. It is a good move as it provides clarity to the players on what the government expects from them.

Notwithstanding, expect major pains, and more than 50% of fintechs would need to mutate as a result of the new rule. I can count 10 startups which hold customers money, and which by this new rule must upgrade their licenses or leave the business. Next week would be a busy one for most fintech boards!

The central bank explained that under the new license, only MNOs are permitted to hold people’s money.

“Only MNOs are permitted to hold customer funds; companies seeking to combine activities under the switching and MNO categories are only permitted to operate under a holding company structure with the subsidiary entities.

“Payment system companies in the PSS category may hold any of payment solution service provider (PSSP), payment terminal service provider (PTSP) and super agents license or a combination of all.

“All licensed payment service providers are required to obtain a no-objection from the payments system management department. Collaborations between licensed payment companies, banks and other financial institutions in respect of products and services are subject to CBN’s prior approval,” CBN said.

According to the Apex bank, the minimum capital requirement for MNOs is N2 billion; switching and processing, N2 billion; PSS, N250 million; super agent, N50 million; payment solution service provider, N100 million; and payment terminal service provider, N100 million.

Yet, this is not the rule we have been waiting for. Yes, when will the government provide clarity on the cryptocurrency sector in Nigeria? A needed regulation has been hanging for a long time even when the industry is developing at a very fast rate.

Court Rules Stamp Duty on Bank Transactions Illegal As CBN Approves New License for Nigerian Payment System

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