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CBN Regulatory Framework for Non-Bank Acquiring in Nigeria
The CBN has released a regulatory framework for non-bank acquiring to all deposit money banks, payment service providers and all financial institutions in Nigeria.
The CBN circular stated that the framework is in furtherance of its mandate to promote a sound financial system and facilitate the development of electronic payments service in Nigeria.
CBN regulatory framework for Non-Bank Acquiring in Nigeria names these participants:
- Non-Bank Acquirer
- Settlement Bank/Sponsor Bank
- Merchant’s Deposit Money Bank
- Card Schemes
- Other Payment Schemes
- Nigeria Central Switch (NCS)
It further outlines the roles of each of the particiants as well as a note on their policies.
It says that Non-bank Acquirers shall have in place adequate policies for the management of risks associated with the acquiring services.
The policies must include minimum standards established by the payments schemes (including card schemes) to mitigate risk to the payment system.
The policies shall be approved by the acquirer’s Board of Directors or as appropriate, an executive management committee. Upon request, these policies shall be made available to the relevant scheme.
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CBN requirements to provide Non-Bank acquiring in Nigeria – Regulatory Review and Approval
- The company shall be a CBN-licensed Switching Company or any other company as approved by the Bank
- Evidence of engagement with a card scheme
- Due Diligence and Merchant Onboarding Process
- Merchant Risk Monitoring Framework
- Sponsorship letter from one settlement bank
- Draft merchant agreements
- Details of its settlement arrangements
- Service Level Agreement (SLA) with Settlement Bank
- Business continuity plan
- Any other document(s) as may be required by the Bank
