CBN gives approval to MTN, Airtel Glo other payment service banks to sell dollar

The Central Bank of Nigeria (CBN) has published guidelines for supervising Payment Service Banks (PSBs).

The framework allowed the PSB operators to sell foreign currency, particularly dollars, to authorized foreign exchange dealers, among other things.

Legit.ng recently reported that CBN approved MoMo Agent by MTN, SmartCash by Airtel, and to MoneyMaster by Glo as PSB for financial transactions.

Other payment service banks in Nigeria include Hope PSB Ltd, 9 PSB.

The Nation reports that CBN, in its framework, noted that PSBs can sell foreign currencies (forex) realised from inbound cross-border personal (remittances) to licenced foreign exchange dealers.

CBN, however stressed that the PSBs are only to offer smaller-scale banking operations and the absence of credit risk and foreign exchange operations.

The CBN framework also authorised the PSBs to accept deposits from individuals and small businesses, which shall be covered by the deposit insurance scheme; carry out payments and remittances (including inbound cross-border personal remittances) services through various channels within Nigeria.

The framework says the operators are expected to leverage on technology to provide services that would be easily accessed by the unbanked population and those who are in hard-to- reach areas of the country.

The framework also showed that CBN wants the PSBs to operate mostly in rural areas and unbanked locations targeting financially excluded persons, with not less than 25 per cent financial service touch points in rural areas defined by the CBN from time to time.

CBN added: "They are to enter into direct partnership with card scheme operators. Such cards shall not be eligible for foreign currency transactions; they can also deploy ATMs in some of these areas; deploy Point of Sale devices and be at liberty to operate through banking agents."

"The PSBs can also issue debit and pre-paid cards on its name; operate electronic wallet; render financial advisory services; and invest in Federal Government of Nigeria and CBN securities."

In addition to operating current and savings accounts, they can also offer payments and remittance services, issue debit and prepaid cards, deploy Automated Teller Machines (ATMs) and other technology-enabled banking services to the people, majority of whom cannot be reached by the conventional banks.

CBN framework reiterated that the key objective of setting up PSBs is to enhance financial inclusion by increasing access to deposit products and payment/remittance services to small businesses, low-income households and other financially excluded entities through high-volume low-value transactions in a secured technology-driven environment.