How to Obtain a Payment Terminal Service Provider (PTSP) License in Nigeria
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A Payment Terminal Service Provider (PTSP) license is issued by the Central Bank of Nigeria (CBN) to financial technology companies that deploy, maintain, and support Point of Sale (POS) terminals. This license allows fintech companies to offer payment solutions to merchants, ensuring seamless transaction processing.
Some notable PTSP-licensed companies in Nigeria include:
- Callphone Limited
- 3Line Card Management
- Appmart Integrated Limited
- Betastack Technology Limited
- Capricorn Digital Limited
- Blusalt Financial Services Limited
If you’re looking to obtain this license, here’s a breakdown of the process, requirements, costs, and compliance standards.
Requirements for Obtaining a PTSP License
To apply for a PTSP license, a company must meet the following legal and operational requirements:
1. Corporate Registration and Documentation
- Certificate of Incorporation (Company must have a minimum paid-up share capital of ₦100 million)
- Memorandum & Articles of Association
- Corporate Affairs Commission (CAC) Status Report
- Tax Clearance Certificate (for three years, if applicable) and Taxpayer Identification Number (TIN)
2. Company Profile and Ownership Structure
- Description of business operations, products, and services
- Details of holding or parent company (if applicable)
- Ownership structure (private/public, parent company, and any recent ownership changes)
- Total number of employees and company organogram
- Functional physical office address, official email, and contact numbers
3. Governance and Management
- Board of Directors (must include a Chairman, CEO/MD, and at least one Independent Non-Executive Director)
- Bank Verification Number (BVN), Curriculum Vitae (CVs), and government-issued ID (National ID, International Passport, Driver’s License, or Voter’s Card) for Board members and top management
4. Business Plan
Applicants must submit a detailed business plan, including:
- Nature of business and features of the payment scheme
- Security framework for transaction safety
- Five-year financial projections and revenue model
- Proposed transaction fees and charges
- Terminal deployment, POS support strategy, and uptime guarantee (99.9% reliability)
- Customer service and dispute resolution policies
- Partnerships and alliances (with banks, merchants, and telcos)
- Competitive advantage and market expansion plans
5. Information Security and Compliance Policies
The company must have well-defined policies, including:
- Privacy Policy & Data Protection Policy
- Cybersecurity & Encryption Standards
- Fraud Detection & Anti-Money Laundering (AML) Compliance
- Disaster Recovery & Business Continuity Plan
6. Partnerships and Agreements
- Draft agreements with technical partners, participating banks, merchants, and telcos
- Service Level Agreements (SLAs) for agent banking operations
- Risk management policies for fraud prevention and Know Your Customer (KYC) compliance
7. Industry Certifications
Depending on the company’s scope, applicants may need certifications such as:
- Payment Card Industry Data Security Standard (PCI DSS)
- Payment Application Data Security Standard (PADSS)
- Payment Terminal Service Aggregator (PTSA) Certification
Cost of Obtaining a PTSP License
The total cost for obtaining a PTSP license includes:
- ₦100 million share capital (deposited with CBN but refunded after approval)
- Application fee: ₦100,000
- License fee: ₦10 million
- Service fee: Varies based on professional assistance
Timeline for Obtaining the License
The licensing process is divided into two stages:
- Approval in Principle (AIP): Takes 2–3 months and is valid for 6 months.
- Final License: Issued 6–8 months after AIP approval. Business operations can only commence after the final license is granted.
Regulatory Compliance and Operational Requirements
To maintain compliance, a PTSP must adhere to CBN’s operational guidelines, including:
- Board and Management Requirements: Directors and key personnel must have proven integrity, competence, and financial soundness.
- Technology Infrastructure: Secure systems for data encryption, fraud prevention, and secure payment processing.
- Risk Management Framework: Policies for financial risk assessment, cybersecurity, and disaster recovery.
- Customer Protection Policies: Robust dispute resolution, fair pricing, and transparency in transaction fees.
Validity and Renewal of the PTSP License
- The PTSP license is issued for a specific duration (determined by CBN).
- Renewal is subject to CBN’s discretion, based on the company’s performance and regulatory compliance.
Conclusion
Obtaining a PTSP license in Nigeria is a rigorous process that requires financial capability, operational readiness, and regulatory compliance. Engaging professional consultants can help streamline the application process and ensure compliance with CBN. Contact us today to get started.
