FinTech (Financial Technology) is a term that emerged in the 21st century and has been used to describe automated delivery of financial services. This new technology has had a significant impact on banking systems and other financial institutions. With the recognisable positive impact, several companies have imbibed it, leading to the proliferation of
FinTech companies that provide financial solutions. In Nigeria, these companies include Paystack, Flutterwave, Interswitch, PiggyVest, Paga, Kuda, Remitta, etc.
To effectively drive financial solutions, these companies have been required to undergo some federal registrations and adhere to certain regulations. For upcoming FinTech companies to be able to operate unhindered in the country, the following licenses ought to be acquired.
Payment Solution Services (PSS):
This refers to all the activities permitted for Payment Solution Service Providers (PSSP). The requirements include:
- Corporate documents
- Company TIN
- Company profile
- Company ownership details and structure
- Signed agreements with its sub-agents, financial institutions, and partners
- BVN, CV and means of ID of the directors and top management
- Minimum of 50 agents
- Evidence of payment card security certification and other relevant payment terminal certification
Fee Requirements:
- Application fee of N100,000
- Payment of the refundable sum of up to 250 million (depending on which of the licenses the company wishes to obtain)
- Licensing fee of N1,000,000 to be paid before the issuance of the final licence
Payment Terminal Service Provider (PTSP) Licence:
This refers to POS Terminal deployment and services and POS terminal ownership. The requirements include:
- Corporate documents
- Company TIN (Taxpayer Identification Number) and Tax Clearance Certificate (TCC) of three years (if applicable)
- Company profile
- Company ownership details and structure
- Signed agreements with its sub-agents, financial institutions, and partners
- BVN, CV and means of ID of the directors and top management
- Minimum of 50 agents
- Evidence of payment card security certification and other relevant payment terminal certification
- Project deployment methodology
Fee Requirements:
- Application fee of N100,000
- Payment of the refundable sum of up to 100 million (depending on which of the licenses the company wishes to obtain)
- Licensing fee of N1,000,000 to be paid before the issuance of the final licence
Payment Solution Service Provider (PSSP) Licence:
This implies payment processing gateway; payment solution development; and merchant service aggregation and collection. The requirements include:
- Corporate documents
- Company TIN (Taxpayer Identification Number) and Tax Clearance Certificate (TCC) of three years (if applicable)
- Company profile
- Company ownership details and structure
- Signed agreements with its sub-agents, financial institutions, and partners
- BVN, CV and means of ID of the directors and top management
- Minimum of 50 agents
- Evidence of payment card security certification and other relevant payment terminal certification
Fee Requirements:
- Non-refundable application fee of N100,000
- Payment of the refundable sum of N100 million in escrow to the CBN
- Licensing fee of N1 million to be paid before the issuance of the final licence.
Super-Agent Licence:
The Super-Agent License is necessary for rendering certain banking services such as cash deposit, withdrawal, bill payments, local fund transfer, etc. The requirements for obtaining the licence include:
- Corporate documents
- Company TIN
- Company profile
- Company ownership details and structure
- Signed agreements with its sub-agents, financial institutions, and partners
- BVN, CV and means of ID of the directors and top management
- Minimum of 50 agents
- Reference letter from a financial institution and signed agreement with the sub-agents, financial institution, and business partners
- Must have existed for over 12 months
- Requisite policies and framework
- Payment Terminal Service Aggregator of Payment Terminal Application Certification
Fee Requirements:
- Application fee of N100,000
- Payment of the refundable sum of up to 50 million (depending on which of the licenses the company wishes to obtain)
- Licensing fee of N1,000,000 to be paid before the issuance of the final licence
Regulatory Sand Box:
This regulation is aimed at stimulating innovation and deepening financial inclusion. The requirements to be met are:
- Corporate documents including shareholding structure
- Company details and profile
- Project plan, business proposal and outline of the strategy of the sandbox trial
- Evidence of patent rights (if applicable)
- CV of directors and top management
- Requisite policies and framework
There are other regulations and licences to be obtained by FinTech companies that want to operate in Nigeria. These include the Mobile Money Operator Licence and Switching and Processing Licence, which are more expensive to obtain.
Source: mondaq.com
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