Alert!: Non-Deposit Financial Institutions Facing Removal from Fund Transfer Channels
So, word on the street is that the Nigeria Interbank Settlement System Plc (NIBSS) just dropped a bombshell for banks in Nigeria. Brace yourself, because they’ve been told to boot out every non-deposit-taking financial institution from their NIP fund transfer channels.
And, who falls under this non-deposit-taking financial institution category? We’re talking about switching companies, payment solution service providers, and super agents. You know, the usual suspects. Now, where are they getting the boot from? Well, it’s from the USSD, mobile banking apps, POS, ATMs, and even web and internet platforms. No channel is safe!
According to the latest NIBSS circular, having these non-deposit-taking folks listed as beneficiaries on your NIP funds transfer channels is a big no-no. It’s against the CBN Guidelines on Electronic Payment of Salaries, Pensions, Suppliers, and Taxes in Nigeria dated February 2014. Talk about breaking the rules.
But here’s the lowdown: these financial institutions, despite being banned from the inflow party, can still process outflows as if they’re VIPs. The circular clarified, “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.”
Now, what’s the real deal for Fintechs in this story? Well, they’re the main characters facing eviction from the fund transfer channels of banks. The catch is that they can still help you send money out, but don’t expect them to catch any funds themselves.
In a nutshell, these Fintech platforms are in a tough spot. They can do outward transfers like pros, but the money can’t flow back their way. The solution? Get themselves some banking licenses that allow them to hold funds. It’s basically upgrading to VIP status in the financial world.
So, who’s feeling the heat the most? Small business owners! They’re the ones who heavily rely on these Fintech platforms for their money moves. But fear not, because word on the street is that these Fintechs are on a mission to get those banking licenses ASAP. Nobody wants their business to go down the drain.
Stay tuned for the Fintech updates!
