By Chrystal NK Chukudebe
FRI 28 MAY, 2021-theGBJournal- According to the Central Bank of Nigeria (CBN), the Framework sets out the procedures for the operation of Non-Bank Merchant Acquiring in Nigeria, including the rights and obligations of the parties involved in the process. It also compels Non-Bank Merchant Acquirers to meet the minimum standards of operations, as approved by the Bank.
The objectives of Framework published today by the CBN are to establish Non-Bank Acquiring as a regulated service in Nigeria and provide minimum standards and requirements for the operations of Non-Bank Acquiring in Nigeria.
According to the CBN, Regulatory Framework shall guide activities of the participants in the provision of Non-Bank Acquiring services in Nigeria. Participants are Non-Bank Acquirer, Settlement Bank/Sponsor Bank, Merchant’s Deposit Money Bank, Card Schemes, Other Payment Schemes and Nigeria Central Switch (NCS).
The new framework also set out Roles and Responsibilities of Participants, Documents and Policies, Merchant Underwriting, Merchant Risk Monitoring as well as Settlement Arrangements, Sponsorship Arrangements, Payment Scheme Licence/Approval, Risk Management an appropriate governance structure, to manage the risk inherent in the acquiring service.
It also spelt out Requirements for Regulatory Review and Approval which the CBN will provide Non-Bank acquiring in Nigeria.
Among the rules of engagement is the provision for Termination of Approval which specifically says The Bank shall terminate a Non-Bank Acquirer’s Approval in the event of failure to meet the conditions for renewal of operating licence, as a switching and processing company in Nigeria. This include Revocation of licence/approval by the Bank, Termination of agreement with or approval of payment scheme(s), Inability to maintain relationship with at least two (2) payment schemes, Operational failures that lead to significant losses/fraud; or Any other reason(s) as may be determined by the Bank, from time to time.
There is provision for Consumer Protection/Dispute Resolution process which says that any dispute arising out of, or in relation to this Framework, shall be settled in accordance with CBN’s Consumer Protection Regulation. If unresolved, may be referred to an arbitration panel, as provided under the extant Arbitration and Conciliation Act or as maybe defined by the Bank from time to time.
In the Rules for Compliance and Sanctions section the framework says that all parties shall comply with the provisions of this Framework, and other related Guidelines issued by the CBN. Non-compliance shall attract appropriate sanctions by the CBN.
According to the apex bank, ‘’ This Framework shall prevail, on matters of non-bank acquiring service, in the case of conflict with any prior Guidelines issued by the CBN.’’