CBN issues Guidelines for Licensing and Regulation of Payments Service Holding Companies in Nigeria

The CBN has issued Guidelines for Licensing and Regulation of Payments Service Holding Companies in Nigeria to facilitate the understanding of regulatory requirements for operations of a Payments Service Holding Company (PSHC) in Nigeria.

The regulation requires companies desirous of operating more than one licence category, to set up a Payments Service Holding Company (PSHC) (hereinafter referred to as a Payments Service Holding Company (PSHC)), with activities of subsidiaries clearly delineated. This arrangement would prevent commingling of activities, facilitate management of risks and enable the Central Bank of Nigeria exercise adequate regulatory oversight on all the companies operating within the Group.

The affected regulated payment activities are:

1. Mobile Money
   1. Switching and Processing
   1. Payment Solution Services
   1. Any other activity as may be approved by the CBN
   Operations

Under this arrangement, a Non-operating PSHC shall be formed to hold equity investment in the separate companies in a “parent-subsidiary” arrangement. In serving as a source of financial strength to its subsidiaries, a PSHC shall maintain financial flexibility and capital-raising capabilities to support its subsidiaries. It shall also be capable to provide and use available resources to augment the capital of its subsidiaries, in the event of financial stress or adverse conditions .

The guidelines states that for an AI the applicant must pay A non-refundable application fee of N1,000,000.00 while for the financal license the fee is N5 million or such other amount that the CBN may specify from time to time; payable to the Central Bank of Nigeria, through electronic transfer.

The guidelines further lists the permissible and non permissible activities for the Payments Service Holding Companies

You can DOWNLOAD and READ the full guidelines here