HOW TO OBTAIN A FINTECH LICENSE: PSSP LICENSE IN NIGERIA

A Payment Solution Service Providers (PSSP) licence is a financial licence usually owned by financial technology businesses. A PSSP licence enables businesses to provide electronic payment services, manage and process transactions, and provide technical services related to digital payments. It is important to note that this license does not authorize the licensee to hold customers’ funds or create and issue wallets.

The Central Bank of Nigeria (CBN) is the regulatory body that issues PSSP licenses in Nigeria and also oversees the activities of PSSP licensees in Nigeria. This license is mostly used by financial technology (Fintech) companies such as Afara Partners Limited, Akupay Services Limited, Aliancepay Limited, Angala Financial Technologies Limited, Appmart Integrated Limited, Bestaff Payment Solutions Limited and a host of others

Who can Apply for a PSSP Licence in Nigeria

A company that is duly registered with the Corporate Affairs Commission (CAC) in Nigeria with the required minimum share capital can apply for a PSSP licence in Nigeria.

Can a Foreigner obtain a PSSP License in Nigeria

A foreigner can obtain and a PSSP license in Nigeria as far as the necessary requirements are met.

Requirements for Obtaining a PSSP Licence from the CBN in Nigeria

The process of obtaining a PSSP licence is in two stages namely the Approval-in-Principle (AIP) and Final Licence. The first part is the AIP before the final license stage. The process is thus:

1. An application letter for a PSSP license to the Director, Payments Systems Management Department of the CBN with the following documents:
2. Certificate of incorporation of the company with the Corporate Affairs Commission (CAC), with a share capital of N100,000,000 (One Hundred Million Naira)
3. Memorandum and Articles of Association of the company
4. Form CAC 2A (Return of Allotment of shares)
5. Form CAC 7A (Particulars of Directors)
6. Tax Clearance Certificate (TCC) and Tax Identification Number (TIN) of the Company
7. Company’s profile
8. Details of ownership
9. Board structure
10. Business plan
11. Information Technology policy
12. Dispute resolution framework
13. Necessary certifications such as Payment Card Industry Data Security Standard (PCIDSS), Payment Terminal Service Aggregator (PTSA), etc.
14. Evidence of payment of the non-refundable application fee of N100,000 (One Hundred Thousand Naira).
15. Evidence of the deposit of the refundable minimum capital of N100,000,000 (One Hundred Million Naira). This is required to be made in full (one lump sum) and in the name of the applicant.
16. Upon assessment by CBN of the application for the PSSP licence and it is satisfied with the application, it proceeds to grant an Approval-in-Principle.
17. Upon obtaining AIP from the CBN, the applicant then makes payment of the licence fee of N1,000,000 (One Million Naira) to the CBN designated account and proceeds to apply for a final licence within six months of obtaining AIP.
18. The CBN inspects the registered place of business of the applicant company and its readiness to commence operation and proceeds to issue the final licence if it is satisfied with the outcome of its inspection.

What services can be Provided with a PSSP License

1. Facilitation of payment transactions between customers, banks, and merchants.
2. Provision of a platform that allow businesses to accept and process payments through different channels, such as debit/credit cards, mobile wallets, and bank transfers.
3. Enable online businesses to integrate payment solutions on their websites or mobile apps.
4. Implementing security protocols and tools to mitigate fraud and ensure the integrity of transactions.
5. Offering detailed analytics and reporting for merchants to track their payment activities and manage finances effectively.

Validity and Renewal of PSSP Licence

The validity of the license is determined by the CBN and renewable if the operations of the licensee is satisfactory to the CBN.

Conclusion

A PSSP license helps link banks, merchants, and consumers for the operation of payment systems. Due to the calibre of institutions involved, it is important that licenses take the licensing process serious and comply with the requirements for licensing and post licensing.

If you are looking to venture into this type of payment service and acquiring a PSSP license you can contact us to guide you on the process.