PSSP: e-payment platforms soothing financial transactions for Nigerians
To make people’s lives simpler, financial and technological advancements have recently become more intertwined and are now functioning in parallel cycles. Financial technology, often known as FINTECH, has become the new standard following the global financial crisis of 2008, which was a turning point for financial technology to come into full swing.
Things and times change with the seasons; this is common in the world. Finance operations and transactions continuously evolve from a manual to a technological basis. It is, therefore, not a surprise that the Central Bank of Nigeria (CBN) mandated the licencing of all PSSP operators in the country.
These PSSPs, who are regarded as FinTech firms, have emerged and provide operational services to banks, other financial institutions, and the general public. They are now critical to all forms of financial transactions in the country.
So, what is PSSP? Who are the PSSP operators in Nigeria? Why are they associated with several innovations connected to payment services in today’s Nigeria? Importantly, what are the requirements to be a licenced PSSP operator in Nigeria?
What is PSSP?
Payment Service Solution Providers (PSSP) are the collective number of firms that make up Nigeria’s primary e-payment framework. These companies are now permitted by the CBN to provide players in the financial services sector with end-to-end electronic payment solutions, systems, and services.
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In Nigeria, providers of payment service solutions have systems that are directly connected with the main financial systems of some institutions, as well as direct integration into the Visa, Mastercard, and Verve card schemes.
A merchant or personal account must often be opened with a bank before a business or individual plans to purchase or sell something online. These companies are known as payment solution service providers or PSPs, and they specialise in processing online payments.
A list of some major PSSP companies in Nigeria
eTranzact
Nigeria’s first multi-application, multi-channel electronic transaction switching and payment processing platform, eTranzact, has won several awards. Several forward-thinking organisations and people rely on eTranzact to conduct their everyday financial operations, and the company processes billions of dollars annually.
Parkway Project Limited
Parkway is a provider of payment service solutions whose mission is to offer end-to-end, easy-to-use corporate, retail, and transaction banking solutions. Partner banks can increase market share and forge closer connections with companies all over the continent thanks to their core platform and service offerings for governmental organizations, major corporations, and small and medium-sized enterprises (SMEs).
Interswitch webpay
One of the first providers of payment service solutions in Nigeria is Interswitch. It is an integrated digital payments and commerce firm with a focus on Africa that makes it easier for people and companies to exchange value in a fast and reliable manner using electronic means.
Flutterwave
A group of former bankers, business owners, and engineers formed Flutterwave in 2016. This Nigerian company provides a robust payment gateway for its customers. The company’s technology is well-reputed and it is utilised not just in Nigeria but across the African continent.
Paystack
Despite being relatively young, Paystack is quickly rising to the top of the list of Nigeria’s top providers of payment service solutions. Their primary goal is to develop technology that will support the expansion of Africa’s top companies, from fresh start-ups to established market players introducing novel business strategies. An Irish-American financial services company, Stripe, purchased Paystack for a reported $200 million in 2020.
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Remita
The Remita mobile app and website, Internet Banking, Point of Sales (PoS) Terminals, Debit/Credit Cards, Merchant’s Website, Bank Branches, Mobile Wallets, and Standing Order/Direct Debit are just a few of the nine channels through which businesses can easily and quickly receive payments from customers in Nigeria. The Federal Government of Nigeria’s Treasury Single Account (TSA), the most significant of its type in Africa, is made possible by utilising the company’s services.
VoguePay
VoguePay is an easy-to-use provider of payment service solutions. It is an online payment platform that makes it easier and faster to send and receive payments from anybody in any currency. Payments are made with cards and bank transfers.
Other popular PSSPs in Nigeria include but are not limited to the following:
- CashEnvoy
- Fetswallet
- Paga
- Kongapay
- PayU
- Amplify
- ReadyCash
- Renmoney
- GTPay
- PayChoice
CBN’s guidelines for obtaining a PSSP license in Nigeria
To encourage a robust and reliable payment system in the country, advance financial inclusion and improve low-income people’s access to financial services via technology, the CBN has made PSSP licensing a priority.
It transmitted a circular on December 9, 2020, authorising new license classifications for payment systems to all payment service providers, banks, and other financial institutions. The circular categorised licenses for payment systems into four main groups: Switching and Processing, Mobile Money Operations, Payment Solution Services, and Regulatory Sandbox.
Based on the CBN’s stipulated regulations, the PSSPs in Nigeria is broken down into three categories:
- PSP Super License
- PSP Standard License
- PSP Basic License
The PSP Super License category requires that the licensee does have at least N5 billion in shareholder funds. A total of N2 million is required for this category’s application cost and N1 million is required for renewal, respectively. A three-year period is the license’s validity.
Below are the requirements for obtaining a PSSP license:
- Provision of N100,000,000.00 (One hundred million naira of shareholders’ funds unimpaired by losses)
- Preceding 3-year audited financial statements of the company (if applicable)
- Escrow of refundable N100m into CBN PSP Share Capital Deposit Account No. 1000014009
- a) Deposit for escrow must be in full (one lump sum)
- b) It must be made in the name of the company applying for the licence (not an individual or related company)
- c) Escrowed funds are invested in treasury bills, subject to the availability of treasury instruments, which would be refunded accordingly.
Application and Licensing Fee
- Non-refundable application fee of N100,000.00 (One hundred thousand Naira) payable to the CBN via the Licensing Fees for Payment Products Account No. NGN140230089/ABJ.
- Licensing fee of N1,000,000.00 is to be paid before the issuance of the final licence, if successful.
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