CBN Plans New Licensing Regime to Address Emerging FinTech Issues
By Modupe Gbadeyanka
The Central Bank of Nigeria (CBN) has proposed new licensing regime for all categories of payment service providers and financial technology (FinTechs) companies in the country.
This it said when fully implemented, it will properly position the apex bank to adequately address the emerging issues of FinTech with respects to cyber risks, risk management framework, capital adequacy, better focused regulation and oversight operations.
FinTechs have been evolving with innovative products which are gaining acceptance within the country and banks have been collaborating with these technology companies in order to remain competitive in the financial services ecosystem.
The emergence of FinTechs in the financial system’ accentuates the known risks within the financial system.
In particular, the operational risk dynamics within the financial system is fast evolving with an increasing reliance on FinTech platforms and the, growing level of acceptability of their services by
In a circular signed by the Director of Banking and Payments System Department at CBN, Mr ‘Dipo Fatokun, as soon as the new license regime is implemented, companies will be expected to notify the CBN before starting any new activity under its licence category.
It explained that for example, a super licence holder who initially had been approved for only PSSP and Switching operations must inform the CBN (for information purposes only) if it subsequently decides to commence PTSP operations.
“PSPs that perform merchant service aggregation functions shall not hold settlement funds of the merchant.
“The merchant service aggregator process shall only facilitate settlement by providing the acquirer with the necessary settlement files to complete settlement,” the circular said.