How to Obtain a Payment Solution Service Provider (PSSP) License in Nigeria
Table of contents
What is a PSSP License?
A Payment Solution Service Provider (PSSP) license is issued to financial technology companies to facilitate electronic payment services. With this license, businesses can process transactions, provide digital payment solutions, and offer technical services related to online payments. However, it does not authorize the licensee to hold customer funds or create and issue wallets.
The Central Bank of Nigeria (CBN) regulates and issues PSSP licenses, ensuring compliance with financial regulations. Companies such as Afara Partners Limited, Akupay Services Limited, AlliancePay Limited, and Appmart Integrated Limited are examples of businesses operating under this license.
Who Can Apply for a PSSP License in Nigeria?
Any company registered with the Corporate Affairs Commission (CAC) in Nigeria with the required minimum share capital of ₦100 million is eligible to apply.
Can a Foreigner Obtain a PSSP License in Nigeria?
Yes, foreigners can apply for and obtain a PSSP license in Nigeria as long as they meet all regulatory requirements.
Requirements for Obtaining a PSSP License from the CBN
The licensing process is divided into two phases:
1. Approval-in-Principle (AIP) Stage
Applicants must submit a formal application to the Director, Payments System Management Department of the CBN, along with the following documents:
- Certificate of Incorporation from CAC, showing a minimum share capital of ₦100 million
- Memorandum & Articles of Association
- CAC Forms:
- Form CAC 2A (Return of Allotment of Shares)
- Form CAC 7A (Particulars of Directors)
- Tax Clearance Certificate (TCC) and Tax Identification Number (TIN)
- Company Profile, including business operations, ownership structure, and board composition
- Business Plan, detailing the company’s payment service model and financial projections
- IT Policy, covering cybersecurity measures and data protection compliance
- Dispute Resolution Framework
- Industry Certifications, such as:
- Payment Card Industry Data Security Standard (PCIDSS)
- Payment Terminal Service Aggregator (PTSA)
- Evidence of Payment for the non-refundable application fee of ₦100,000
- Deposit Confirmation for the refundable minimum capital of ₦100 million, which must be paid in full in the company’s name
Once the CBN reviews the application and finds it satisfactory, it grants an Approval-in-Principle (AIP).
2. Final License Stage
After obtaining the AIP, the applicant must:
- Pay the final licensing fee of ₦1 million to the CBN
- Apply for the final license within six months of obtaining the AIP
- Undergo a CBN inspection, where the regulatory body assesses the company’s physical office and operational readiness
If the company passes the inspection, the final PSSP license is issued, allowing the business to operate legally in Nigeria.
Services Allowed Under a PSSP License
With a PSSP license, businesses can:
- Facilitate payment transactions between banks, merchants, and customers
- Provide platforms for businesses to accept and process payments via cards, mobile wallets, and bank transfers
- Enable online businesses to integrate payment solutions into websites and mobile apps
- Implement fraud prevention measures and ensure transaction security
- Offer detailed transaction analytics and reporting for merchants
Validity and Renewal of a PSSP License
The PSSP license is granted for a specific period determined by the CBN and can be renewed based on the company's compliance and operational performance.
Conclusion
A PSSP license is essential for fintech businesses looking to process electronic payments in Nigeria. Given the regulatory complexities involved, companies must carefully follow the licensing process to ensure full compliance.If you are looking to obtain a PSSP license in Nigeria, contact us today for expert guidance and support.
