In one of my previous articles, i explained the Regulatory Framework governing International Money Transfer Operator (IMTO)Services in Nigeria as well as its scope in terms of permissible and non-permissible activities.
In this article, the topic will be International Mobile Money Remittance services, a sub-category of Mobile Money Operators (MMO) in Nigeria and the focal points treated therein will be :-
– The Regulatory Framework governing IMMRS
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– The permissible and non-permissible activities allowed for IMMRS
– The recognized participants in an IMMRS venture
– The licensing requirements for IMMRS
What is the Regulatory Framework governing IMMRS in Nigeria?
IMMRS licensing and operation in Nigeria is governed by the Central Bank of Nigeria which maintains a Regulatory oversight through the Banks and Other Financial Institutions Act (BOFIA) and mainly the CBN Guidelines on International Mobile Money Remittance Services in Nigeria 2015(or ‘the guidelines’) with the following objectives:-
– The provision of minimum standards and requirements for the operation of International funds remittance over/via mobile services in Nigeria.
– The specification of delivery channels for offering International funds remittance over mobile devices in a cost-effective manner.
– The provision of an enabling environment for International funds remittance over mobile devices in the Nigerian economy.
– The provision of broad guidelines for the implementation of processes and flows of International Money Transfer services, from initiation to completion.
What are the permissible and non-permissible activities for IMMRS in Nigeria?
Permissible Activities
– Inbound remittances via Mobile phone transfers & other hand held devices to persons resident in Nigeria & foreign visitors in Nigeria.
– Outbound Person-to-Pereson remittances from Nigeria to beneficiaries in other countries for purposes of family maintenance and personal expenses.
Non-Permissible Activities
– The facilitating of transactions or rendering remittance services for corporate customers.
Who are the participants in an IMMRS venture?
A typical IMMRS scheme in Nigeria is made up of the following participants :-
– Banks
– Mobile Network Operators
– Infrastructure Providers
– Consumers
What are the licensing/authorization requirements for IMMRS in Nigeria?
Institutions seeking to venture into IMMRS will have to send through their lawyer an application for an authorization to the Central Bank of Nigeria which may be granted as long as:-
– The applicant holds a Mobile Money Operators license (this is a license category also governed by the Central Bank of Nigeria, you can consult your lawyer on how to secure this type of license).
– The applicant, if a foreign-based entrant, is a registered corporate entity licensed over there to engage in monetary transfer activities.
– The applicant has a net worth of $1 Billion (strictly for Foreign applicants).
– The applicant is established in at least 20 countries in with at least 10 years experience.
– The applicant is in a partnership with an authorized dealer bank in Nigeria.
– Foreign-based companies seeking to render IMMRS services in Nigeria need not be licensed by the Central Bank of Nigeria but must obtain an approval from the CBN to operate in Nigeria.
– Institutions seeking IMMRS licensing have to be preferably registered as Consortiums and in addition to the main application to the CBN for authorization have to submit the following:-
a). Evidence of the formation of the consortium that will deploy the IMMRS project (a Certificate of Incorporation).
b). The consortium’s profile & functional contact details.
c). A shareholding structure of the Consortium.
d). Statutory CAC forms for Returns on Allotment of Shares as well as Particulars of Directors.
e). CVs of the board of directors/management of the Consortium.
f). A Business plan of the Consortium.
g). The IT policy of the Consortium.
h). The Enterprise Risk Management Framework of the Consortium.
i). The Contingency & Disaster Recovery Plan(Business continuity programme) of the Consortium.
j). Draft agreements with the following:-
– Technical partners
– Participating banks
– Switching companies
– Merchants
– Telecommunications companies
– Any other party
k). Project deployment plan
l). Evidence of payment of a non-refundable application fee of 1 Million Naira.
What are the operational requirements for IMMRS Operators in Nigeria?
IMMRS operators in Nigeria must :-
– Be issued with a unique code by the Nigerian Interbank Settlement by NIBBS.
– Be issued a unique short code by the Nigerian Communications Commission.
– Ensure that its Telecommunications equipment is the type approved by the Nigerian Communications Commission (NCC).
– Register users of the scheme based on Tech standards and the requirements of the guidelines.
– Ensure “Know – Your – Customer” (KYC) requirement compliance in its user registration process.
Conclusion :- It is hoped from the above write-up that a clearer understanding of the Regulatory Framework governing International Mobile Money Remittance services as different from International Money Transfer Services has been achieved going forward.