Cbn new pssp categorisation

CBN (Central Bank of Nigeria) has introduced a new categorization for PSPs (Payment Service Providers) in Nigeria. The new categorization is aimed at promoting financial inclusion, improving the efficiency of payment systems, and enhancing the overall payment experience for Nigerians.

The new categorization is based on the type of services offered by PSPs, their level of technology, and their compliance with regulatory requirements. The categories are:

1. Tier 1 PSPs: These are PSPs that offer a wide range of payment services, including card acquiring, card issuing, and online payment processing. They must have a minimum of 10,000 active merchants and process at least N10 billion (approximately $25 million) in transactions per month.
2. Tier 2 PSPs: These are PSPs that offer a limited range of payment services, such as card acquiring or card issuing. They must have a minimum of 1,000 active merchants and process at least N1 billion (approximately $2.5 million) in transactions per month.
3. Tier 3 PSPs: These are PSPs that offer basic payment services, such as cash-in and cash-out services. They must have a minimum of 100 active merchants and process at least N100 million (approximately $250,000) in transactions per month.
4. Tier 4 PSPs: These are PSPs that offer specialized payment services, such as bill payment or utility payment services. They must have a minimum of 10 active merchants and process at least N10 million (approximately $25,000) in transactions per month.

The new categorization has several benefits, including:

• Improved competition: The new categorization allows for more PSPs to operate in the market, which can lead to increased competition and better services for consumers.
• Increased financial inclusion: The new categorization allows for more PSPs to offer services to underserved communities, which can help to increase financial inclusion in Nigeria.
• Enhanced security: The new categorization requires PSPs to meet certain security standards, which can help to reduce the risk of fraud and improve the overall security of payment systems in Nigeria.

Overall, the new categorization is expected to promote the growth of the payment industry in Nigeria, improve the efficiency of payment systems, and enhance the overall payment experience for Nigerians.