CBN amends transaction switching guidelines

The Central Bank of Nigeria (CBN) has amended the guidelines on transaction switching in the country.

The directive towards this was contained in a circular to all banks, mobile money operators and payments services providers the CBN placed on its website on Tuesday.

The circular by the apex bank was signed by its Director of Banking and Payments System Department, Mr Dipo Fatokun, who explained that the amendment was necessary in order to strengthen the nation’s electronic payments system.

He explained that in arriving at the decision to amend the guidelines, CBN took cognisance of the need for a competitive environment, while promoting shared services and innovation.

According to Fatokun, “The bank, in ensuring that the Guidelines on Transaction Switching Services in Nigeria support the objective for payments efficiency and financial inclusion, hereby effects the following changes. Section 2.6.3 of the Guidelines which stipulates that ‘NCS shall not own or promote any card business or retails products and shall be run in accordance with international best practice’ is hereby amended to read as follows:

“The NCS shall be run in accordance with international best practice’. To this end, the Nigeria Inter-Bank Settlement System (NIBSS) Plc shall communicate the Application Programming Interface (API) and other specifications of all its products to all banks and other licensed operators, including switches, mobile money operators and payments services providers, immediately.”

It has been reported of late that banks and electronic payment switch operators refused to route their e-payment transactions through the NCS as directed by CBN, a situation that has made the facility dormant.