Guidelines on New License Categorization for the Nigerian Payment System

This CBN circular restructured the licensing of non-bank payment operators in Nigeria into a clear set of categories, replacing the previously fragmented approach to payments licensing. It establishes the regulatory perimeter under which Nigeria's large fintech and payments sector operates, and most subsequent CBN payments guidance is read against the categories it creates. The circular applies to all companies seeking to provide payment services in Nigeria other than deposit money banks, and sorts permissible activities into four principal licence categories with defined minimum capital. Switching and Processing licensees may operate payment switching, card processing, transaction clearing and settlement, and may also undertake the activities of the lower categories; this is the highest tier and carries a N2 billion minimum shareholders' fund requirement. Mobile Money Operators (MMOs) are licensed to issue electronic money, create and manage wallets and operate pool accounts, and may act as super-agents; they require N2 billion. Payment Solution Services covers a bundle of three permissions, Super-Agent, Payment Terminal Service Provider (PTSP) and Payment Solution Service Provider (PSSP), which may be applied for individually or together, with capital ranging from N100 million to N250 million depending on the permission(s) sought. The circular fixes the principle that a licensee may only carry out the activities expressly permitted by its category and must seek additional approval to expand. Each category is subject to CBN authorisation, ongoing prudential and conduct supervision, periodic reporting, and compliance with extant KYC, AML/CFT and consumer-protection requirements. Holding companies are required where an operator wishes to combine activities that the categorisation keeps separate (for example combining switching with mobile money). The framework is enforced through licence conditions, the power to refuse, suspend or revoke licences, and sanctions for operating outside an approved category. By codifying capital thresholds and activity boundaries, the circular is the foundational reference point for fintech market entry in Nigeria and is routinely cited by the more specific mobile money, agent banking and open banking instruments.

1. 1Four licence categories: Switching and Processing; Mobile Money Operator; Payment Solution Services (Super-Agent, PTSP, PSSP); and related sub-permissions
2. 2Minimum capital: N2bn for Switching and Processing and for MMO; N100m - N250m across the Payment Solution Services permissions
3. 3Activities are ring-fenced to the licence category held; combining categories requires a holding-company structure and additional approval
4. 4Licensees must meet extant KYC, AML/CFT and consumer-protection obligations and report periodically to the CBN
5. 5CBN may refuse, suspend or revoke licences and sanction operation outside an approved category