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Anatomy of Nigerian Fintech Laws

The Approved New Licence Categorizations Requirements (consolidated) 2021  is Nigeria’s licencing regime for Payment Terminal Service Provider (PTSP).


According to NIBSS (Nigerian Inter-Bank Settlement System), a PTSP “ensures the technical and operational standardization of all deployed POS devices through terminal certification”.

A PTSP in the payment system assures availability and standard operations of POS terminals and devices in Nigeria.  – We cross-examined uptime and service availability in Nigeria’s Fintech services here.

Suppose we apply the Five Nines concepts to uptime and service availability in Nigeria’s payment system. In that case, DFS (digital financial services) consumers in Nigeria have more than 36.5 days of downtime per year and 2.4 hours of downtime daily. – In the absence of data showing downtime or service availability, we think that downtime in Nigeria exceeds the annual 36.5 days.

Uptime is a legal right because the CBN requires operators in Nigeria’s payment system to ensure 99.99% and 90% uptime and service availability.

Businesses that consumer a PTSP’s service include:

  • retail and wholesale merchants
  • small and medium-scale enterprises and
  • financial and non-financial institutions
  • MMO’s and other payment system service providers.

NIBSS manages the Electronic Payment Management System (EPMS). EPMS is a terminal management system that oversees the activities of POS terminals and merchants in Nigeria.

Payment Terminal and Application Development (PTAD) certification is a crucial role performed by NIBSS at the request of a PTSP.

The PTSP’s Role in Nigeria’s Payment System

Under the Central Bank of Nigeria’s (“CBN”) New Payment Categorization for the Nigerian Payment System, a PTSP is a category of PSSs (payment solution services).

PTSP’s permissible transactions are:

  • to deploy POS terminals and service POS terminals
  • owner POS – a merchant acquirer is also allowed to own POS terminals in Nigeria
  • PTAD (payment terminal and application development) services
  • Merchant and agent training and support-related services

Any limited liability company registered at CAC (Corporate Affairs Commission) whose business objects include the permissible transactions (above) may apply to CBN’s Director, Payments System Management Department, for a PTSP licence.

The company seeking a PTSP licence will have shareholders’ funds unimpaired by losses of two hundred and fifty million Naira. It is required to escrow one hundred million Naira with the CBN.

An applicant for a PTSP is permitted to apply for the following licences or a combination together with a PTSP licence:

  • PSSP (payment system service providers (PSSP) licence
  • Super-agency banking licence

The escrowed funds are refundable, and the CBN reserves the right to invest the escrowed funds in a TB (treasury bills).

Documentary Requirements for PTSP Licence Application

The company requesting a PTSP licence will submit the following documents to the CBN:

  • Incorporation documents issued by the CAC and the object clauses in the memorandum and article of association must be limited to the permissible business we stated above
  • Three-year tax clearance certificate, where applicable and Taxpayer Identification Number (TIN) of the company
  • Company’s profile detailing the current type of business operation, products and service
  • Structure of the holding company or parent company (if applicable)
  • Share structure and historical changes in share structures for the last two years
  • Total number of employees, organogram, functional physical address, contact e-mails from the company’s domain and telephone numbers
  • Board compositions, indicating at least the chairman, CEO/MD, and one Independent Non-Executive Director and other Director
  • The Board and top management’s bank verification number (BVN), professional profile, valid means of identity
  • Details of the current line of business (if applicable
  • Business plan showing features of the scheme, security features, five years financial projections, proposed schedule of charges, profit sharing arrangement, and diagrammatic illustration of transaction flows
  • Information Technology policy including privacy policy, information ownership/disclosure/loss policy, backup and restore policy, network security and encryption policy, confidential data policy, password and third-party connection policy, incidence response and physical security policy
  • Enterprise risk management framework and dispute resolution framework
  • Contingency and disaster recovery plan or BCP (business continuity plan)
  • Duly executed agreements or drafts, where applicable, with technical partners, participating banks, merchants, Telcos, and other relevant parties
  • project deployment methodology and business plan for the PTSP that shows an understanding of the nature of the POS business and support requirements
  • Terminal deployment and connectivity strategy
  • POS support strategy (on-site and offsite) and process to ensure failures are remotely detected and fixed within 72 hours
  • Securities architecture and features
  • Transaction fees and other charges to the customers and strategy for ensuring 99.9% uptime for terminals
  • Training, merchant relationship management strategy, customer care and issue resolution strategy
  • Procedure to obtain certifications from switches and other relevant bodies
  • A project work plan that demonstrates readiness/ability to commence work
  • Profit sharing agreement among parties and diagrammatic illustration of transaction flows
  • Partnerships & Alliances and BCP (business continuity plan)
  • Competitive advantage/value proposition and planned coverage area
  • Experience with this activity or something similar in the past
  • The following certifications:
  • Payment Card Industry Data Security Standard (PCI-DSS) certificate, where applicable
  • Payment Application Data Security Standard (PA-DSS) or compliance with CBN IT Standards for Solution Development certificate (if applicable)
  • Payment Terminal Service Aggregator (PTSA) of Payment Terminal Application certificate

PTSP Licence Validity

An approval-in-principle (API) for the PSSP licence is valid for six months. Similarly, the CBN determines the validity period of the PSSP commercial licence. Its renewal is subject to the PTSP’s satisfactory performance.

PTSP Licencing Fee

An applicant for a PTSP licence pays the CBN one hundred thousand Naira non-refundable application fee. The applicant pays a one million Naira PSSP licence fee if the application is approved.


This article concludes our commentary on the licencing regime for Payment Solution Services (PSSs) because the PSSs categories are PSSP, Super-agent and PTSP. All the licences under the PSSs category may be combined or operated in silos.

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