The Central Bank of Nigeria (CBN) has reported a 35% increase in adopting digital payments across the country. Among the factors contributing to this are investments in payment technologies by banks, telecommunications, and fintech companies. As a result, Nigeria’s payment landscape is attracting international interest, demonstrating a boom in the number and value of transactions. There is a special CBN fintech license (Payment license) for foreign entities that is required to operate in this thriving market.

Benefits of Acquiring a CBN Fintech License in Nigeria

Strategic positioning

Significantly enhanced role in the financial ecosystem through the CBN license, allowing fintech companies to carry out a wide range of activities.

Regulated cooperation

Sometimes to circumvent regulatory restrictions, fintech companies have often partnered with banks to launch new services. To ensure that products and services comply with license conditions, the CBN’s new guidelines require fintechs to obtain prior authorization.

Access to the regulatory sandbox

With the CBN’s sanctioned sandbox environment, fintech companies can test new products and services without equity restrictions, demonstrating a unique advantage for startups and innovators.

Clarification of authorized services

Reducing uncertainty and explicitly prohibiting mobile money operators (MMOs) from engaging in activities that may mix their operations with money transfer services. The CBN has thus defined the permitted services for different payment organizations.

Capital requirements

In order to enable companies to develop a strategy for recapitalization or acquisition of additional licenses, the CBN has clearly defined the minimum amount of authorized capital for different payment systems, which will help to meet financial thresholds.

Laws for Obtaining a CBN Payment Service Provider License

Growth of the sector

Although clarity on payment services licensing was lacking, Nigeria’s fintech sector has developed significantly.

Complexity of regulation

Making it difficult to determine the specific CBN PSP license required for their operations, fintech companies faced challenges due to numerous regulations.

2018 draft and 2020 circular

Having introduced a new classification of licenses for the payment system, the Central Bank of Nigeria issued an important Nigerian payments system Circular on December 9, 2020. This happened after an initial draft was developed in 2018, which was not officially extended.

Impact on the market

Concerns have been raised among existing and potential investors in the Nigerian payments sector due to the delay in the regulator’s clarification.

Clarification and capital requirements

By lowering the previously high minimum capital requirements, the 2020 Circular provided important information on the license categories. This provides much-needed clarity, making it easier for businesses to comply with the requirements and participate in the market.

CBN Fintech License Categories in Nigeria

License Categories

The Central Bank of Nigeria (CBN) specifies fintech license categories for payment service providers based on the services offered:

  • PSSP License CBN- Payment Solutions Service Provider
  • PTSP License – Payment Terminal Service Provider
  • PSS License – Payment Solution Service
  • MMO License – Mobile Money Operation
  • Switching and Processing License

Key Compliance Points

  1. Only MMOs are permitted to hold customer funds, clarifying the regulatory stance for fintech operations.
  2. Fintechs must operate switching and MMO activities as distinct entities under a holding company structure.
  3. Collaborations with financial institutions require CBN’s prior approval to ensure adherence to regulations.
  4. Fintechs’ Memorandum and Articles must only include activities allowed under their licenses.
  5. A CBN no-objection certificate is mandatory for all fintech license holders and applicants.
  6. Entities must comply with the NPS Circular promptly, ensuring regulatory alignment.

Purposes of Different Categories of PSP Licenses

Payment Solutions Service Provider (PSSP) License

  • Allows for the development of payment processing gateways, solutions, and merchant services aggregation without the capacity to hold customer funds or issue e-money.
  • Entities aiming for a broader scope, including e-money services, must opt for a Mobile Money Operations (MMO) license, requiring higher capital.

Payment Terminal Service Provider (PTSP) License

Focuses on deploying, supporting, and maintaining POS terminals, with notable examples being Interswitch Limited and IntelliFin Solutions Ltd.

Payment Solution Service (PSS) License

  • Offers infrastructure for electronic payment solutions and services, integrating with card schemes and banking systems.
  • Holders can perform Super Agent, PTSP, and PSSP activities.

Mobile Money Operation (MMO) License

  • Supports wallet creation, electronic money issuance, and various payment and remittance services through mobile technology.
  • It excludes loan issuance, foreign currency dealings, and insurance underwriting.

Switching and Processing License

Considered highly valuable, this CBN license enables the routing of transactions across different stakeholders, with activities including card processing and transaction clearing.

Payment License in Nigeria and Ireland

To successfully obtain a CBN license for fintech, it is necessary to clearly meet the financial criteria for the desired PSP category, such as Switching and Processing or MMO. It is worth taking care to submit to the Corporate Affairs Commission (CAC) the constituent documents, financial statements, business plans, and management questionnaires. In addition, you need to demonstrate your compliance and risk management capabilities.

The process of obtaining a money transfer license is detailed, starting with a pre-application consultation and ending with a comprehensive review of the submitted documentation. These requirements include the company’s legal structure, operational plans, financial stability, and management policies. Ensuring that applicants meet Irish regulatory standards for financial transactions and compliance is vital.

CBN Fintech License Requirements

Company Formation Essentials

  1. Propose two company names
  2. Identify the registered company address
  3. Describe the business succinctly
  4. Determine share capital based on CBN license requirements
  5. Include at least two directors, ensuring one is a Nigerian resident, and at least two shareholders, providing full personal details for all

Capital and Documentation Requirements

  1. Switching and Processing License: N2 billion in shareholder funds and an equal escrow amount.
  2. Mobile Money Operation (MMO): Same as above, with escrow invested in treasury bills as permissible.
  3. Payment Solution Service (PSS): N250 million in shareholder funds and an equal escrow amount.
  4. PTSP and PSSP: N100 million in shareholder funds and an equal escrow amount.

Application Documentation

  1. Submit incorporation documents certified by the Corporate Affairs Commission (CAC), including the Certificate of Incorporation and Memorandum and Articles of Association.
  2. Provide audited financial statements and proof of capital for existing companies.
  3. Draft a detailed business plan outlining the operation, security measures, and financial projections.
  4. Include personal details of directors and management, such as Bank Verification Number (BVN) and identity documents.

Additional Requirements

  1. Company profile, risk management, and IT policies, including privacy, data management, and security policies.
  2. Enterprise risk management framework, dispute resolution mechanism, and contingency plans.
  3. Agreements with technical partners, banks, and other entities, if applicable.
  4. Tax Identification Number (TIN) and Tax Clearance Certificate (TCC) for the past three years.

Guide to Acquiring a CBN Fintech License in Nigeria

Company Registration

  • Register a company with the Nigeria Corporate Affairs Commission (CAC).
  • Provide a local company address, nominee director, and company secretary.
  • Expected completion time: approximately 2 weeks.

Bank Account Setup

  • Open a corporate bank account with a reputable Nigerian bank.
  • Deposit the minimum paid-up capital required by CBN into the account.
  • Secure Internet banking facilities.
  • Timeline for completion: around 4 weeks.

Preparation of Business Documents

  • Develop a detailed business plan.
  • Formulate Anti-Money Laundering/Countering Financing of Terrorism (AML/CFT) policies.
  • Create additional documents addressing technology risk management, cyber hygiene, regulatory reporting, penetration testing, and compliance.

Office Sourcing and Setup

  • Identify and secure a physical office location.
  • Legal assistance in drafting and finalizing a lease agreement as per local real estate regulations.
  • Direct lease payments to the landlord.

Executive and Key Personnel Recruitment

  • Fulfill the requirement for at least one resident director.
  • Assist in the recruitment of local executive directors and key officers (Compliance Officer, Chief Technology Officer, and Chief Information Security Officer).
  • Manage initial screenings, interviews, and employment contract preparations, adhering to Nigerian employment regulations.

License Application Submission

  • Submit the comprehensive license application to the CBN.
  • Anticipate in-principle approval within 2 to 3 months.
  • Provide any additional documents promptly to avoid delays in the approval process.


How quickly can I get a CBN PSP License?

Starting from Approval-In-Principle (AIP), it usually takes 6 to 8 months to obtain a CBN PSP license. Once the readiness checks are completed and the N1,000,000 fee is paid, the final license is issued.

How much does a CBN PSP license cost?

The final CBN license fee is N1,000,000 when the application fee is N100,000. Including registration and licensing assistance, the total cost depends on the scope of services required.

What does the AIP allow in the licensing process?

The AIP permits system testing and security enhancements but doesn’t allow business operations. It precedes the final CBN evaluation for license issuance.

What’s essential for a successful CBN license application?

Achieving a CBN fintech license Nigeria success demands accurate registration, sufficient funds, thorough documentation, and effective risk management, aiming for approval in 6 to 8 months.

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