The Central Bank of Nigeria (CBN) has revoked the licenses of seven payment service providers for failing in statutory requirements.
The revocation order was contained in an official gazette published on the website of the apex bank yesterday. The decision had been gazetted since December 4, 2020.
The providers affected are Easifuel Limited, Transaction Processing System (TPS), Grand Towers Limited and Paymaster Limited.
Other operators on the lists are E-Revenue Gateway Limited, Eartholeum Network Limited and Globasure Limited.
The document said the seven companies ceased to carry on the business they were licensed to do for “a continuous period of six months”.
The payment service providers also “failed to fulfil or comply with the conditions subject to which their licences were granted; failed to comply with the obligations imposed upon them by the CBN following the provisions of the Banks and Other Financial Institutions Act (BOFIA),” it added.
The revocation notice followed an earlier retool of operational guidelines of the payment service industry by the Central Bank.
The Guardian had reported that the CBN streamlined the operating rules guiding businesses and operations of the payment service providers.
In the circular, the Bank specified the minimum capital base of the different categories of players operating in the payment ecosystem.
According to the information contained in the licensing framework, the minimum capital of mobile money, as well as switching/processing operators, is N2 billion.
Payment terminal solution service providers (PTSP) and payment solution service providers (PSSP) are required to
have a minimum capital of N100 million while payment solution services players will need N250 million as capitalisation. To operate as a super-agent, one needs minimum capital adequacy of N50 million.
The document also spelt out the activities that are permissible under each business category, which the apex bank said would apply to “new and existing market participants”.
The regulator warned that only companies registered as MMO “are permitted to receive customer funds”. The purpose of the guideline is to ensure a “strong and credible payment system”.
According to the document, “companies seeking to combine activities under the switching and MMO categories are only permitted under a holding company structure with the subsidiary entities delineated to prevent comingling”.
Under the new regulatory template, firms that currently combine the activities would hand off one or float a holding company.
The regulator also noted: “Payment system companies in the PSS category may hold any of PSSP, PTSP and super-agent licence or a combination of the licences thereof.
All licensed payment service providers in any of the categories covered by this framework holding or seeking any other CBN issued licenses are required to obtain a no-objection from the Payment System Management Department.”
It warned that the object clauses in the memorandum and article of association of payment service providers shall be limited to the “permissible activities under their licensing authorization”.