The Central Bank of Nigeria (CBN) has adjusted section 2.6.3 of the Guidelines on Transaction Switching Services in Nigeria.
A recent circular issued by the Banking and Payment System Department, CBN Mr. Dipo Fatokun to all Deposit Money Banks (DMBs), mobile money operators and payments services providers operating in the country, stressed that “The Nigeria Central Switch (NCS) shall be run in accordance with international best practices.”
It further noted that the new directive replaced the section which read as follows: “NCS shall not own or promote any card business or retail products and shall be run in accordance with international best practices.”
The new guidelines further noted that Nigerian Interbank 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.”
The circular set out the procedures for the operation of switching services in Nigeria, including the rights and obligations of the parties to the switching contract. It also compels the switching companies to meet with minimum standards for switching, as approved by the CBN.
Earlier, the apex bank had banned all forms of discriminatory practices in the provision of electronic payment services. It was one of the highlights of two revised guidelines relating to e-payment services issued by the apex bank in the first quarter of the year.
The guidelines are: Guidelines on Transactions Switching in Nigeria; and Guidelines on Operations of Electronic Payment Channels in Nigeria. Among other things the guidelines on transaction switching prohibited Abuse of dominant position by any operator.
It stated: “No parties to Switching Services shall abuse its dominant position by directly or indirectly imposing unfair or discriminatory condition and fees in the provision of its services; “Equally, no parties to Switching Services shall limit or restrict the provision of switching services or market thereof or technical or scientific development relating to switching services to the prejudice of consumers; No parties shall indulge in practice or practices resulting in denial of market access
According to the guidelines, the interface specifications will be provided to all Parties to Switching Services, as part of the NCS Interconnectivity requirements. All interface specifications will conform to the international ISO 8583 standards. All NCS Partner Institutions will have to develop both Issuer and Acquirer Interfaces that comply with the NCS Interface Specification.