CBN Releases Regulatory Framework for Mobile Money Services

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Thursday, April 02, 2015 9.17AM/CBN


A robust payments system is vital for effective monetary policy implementation and the promotion of economic efficiency. The introduction of mobile telephony in Nigeria, its rapid growth and adoption and the identification of person to person payments as a practical strategy for financial inclusion, has made it imperative to adopt the mobile channel as a means of driving financial inclusion of the unbanked. These factors underscore the decision of the Central Bank of Nigeria to issue this regulatory framework to create an enabling environment for the orderly introduction and management of mobile payment services in Nigeria. The framework defines the regulatory environment as a policy path towards achieving availability, acceptance and usage of mobile payment services.

Mobile payment has evolved as a veritable channel for facilitating the growth of commerce.

The use of the mobile phone for the initiation, authorization and confirmation of the transfer of value out of a current, savings or stored value account has been recognized as a development that is expanding the growth of commerce among both the financially included and non included units in the economy.

This regulatory framework addresses business rules governing the operation of mobile payment services, and specifies basic functionalities expected of any mobile payment service and solution in Nigeria. It identifies the participants and defines their expected roles and responsibilities in providing mobile payment services in the system. In addition, it sets the basis for the regulation of services offered at different levels and by the participants.

The overriding vision of achieving a nationally utilized and internationally recognized payments system necessitates strategies to bring informal payment transactions into the formal system.

This framework has identified two models for the implementation of mobile money services namely;

A. Bank Led – Financial Institution(s) and/or its Consortium as Lead Initiator

B. Non-Bank Led- A corporate organisation duly licensed by the CBN as Lead Initiator

The CBN recognizes the importance of Mobile Network Operator (MNOs) in the operations of mobile money and appreciates the criticality of the infrastructure they provide. However, the telco-led model (where the lead initiator is an MNO), shall not be operational in Nigeria.

Its exclusion will enable the CBN have full control of monetary policy operations, minimise risks and ensure that the offering of financial services are driven by organizations that have been licensed by CBN to do so.

2.0 Objectives

The objectives of the regulatory framework are as follows:
A. Provision of an enabling environment for the adoption of mobile payment services in reducing cash dominance in the Nigeria economy.

B. Ensure a structured and orderly development of mobile payment services in Nigeria, with clear definition of various participants and their expected roles and responsibilities.

C. Specification of the minimum technical and business requirements for the various participants recognized for the mobile money services industry in Nigeria.

D. Provision of the basis for broad guidelines for the implementation of processes and flow of mobile payment transactions, from initiation to completion.

E. Promoting safety and effectiveness of mobile money services and thereby enhance user confidence in the services.

3.0 Scope

To achieve the above stated objectives, two types of mobile payment services are identified for operation in Nigeria:

1. The Bank-led Model: This is a model where a bank either alone or a consortium of banks, whether or not partnering with other approved organizations seek to deliver banking services leveraging on the mobile money system. This model shall be applicable in a scenario where the bank operates on stand-alone basis or in collaboration with other bank(s) and any other CBN approved organization. The Lead Initiator must be a bank or consortium of banks, and shall be legally responsible and accountable to the Central Bank of Nigeria and the end users.

2. The Non Bank-led Model: This model allows a corporate organization that has been duly licensed by the CBN to deliver mobile payment services to subscribers. The Lead Initiator must be a corporate organization (other than a deposit money bank or a telecommunication company) specifically licensed by the Central Bank of Nigeria to provide mobile payment services in Nigeria.




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