What Is A Payment Service Bank (PSB)?

Payment Service Banks, abbreviated as PSBs are banks that are licensed by the Central Bank of Nigeria (CBN) to provide financial services through digital means to low-income earners and people that do not use banks or banking institutions for financial transactions.

The first guideline for setting up a Payment Service Bank was issued on October 26, 2018.

On 27th August 2020, the Central Bank of Nigeria (CBN) released an updated and revised guideline for licensing and regulation of setting up Payment Service Banks in Nigeria.

Guidelines Of Running A Payment Service Banks (PSB) In Nigeria

A payment service bank must:

1. Operate mostly in the rural areas and unbanked locations targeting financially excluded persons, with not less than 25% financial service touchpoints in such rural areas as defined by the CBN from time to time

2. Enter into direct partnership with card scheme operators. Such cards shall not be eligible for foreign currency transactions

3. Deploy ATMs in some of these areas

4. Deploy Point of Sale devices

5. Be at liberty to operate through banking agents (in line with the CBN’s Guidelines for the Regulation of Agent Banking and Agent Banking Relationships in Nigeria)

6. Roll out agent networks with the prior approval of the CBN

7. Use other channels including electronic platforms to reach out to its customers

8. Establish coordinating centres in clusters of outlets to superintend and control the activities of the various financial service touchpoints and banking agents

9. Be technology-driven and shall conform to best practices on data storage; security and integrity

10. Set up consumer help desks (physical and online) at its main office and co-ordinating centres

11. Use the words “Payment Service Bank” in its name to differentiate it from other banks

Furthermore, the name of a Payment Service Bank must not include any word that links it to its parent company.

Payment Service Banks In Nigeria

We have three (3) payment service banks in Nigeria and they are:

1. Hope PSB

2. Moneymaster PSB

3. 9PSB

Minimum Capital Requirement For Payment Service Banks

The minimum capital, application and licensing fees required when setting up a Payment Service Bank are:

1. Minimum capital ₦5,000,000,000.00

2. Non-refundable application Fee ₦500,000.00

3. Non-Refundable Licensing Fee ₦2,000,000.00

4. Change of name fee ₦1,000,000.00 (where applicable)

Payment Service Bank Frequently Asked Questions

Question: Does Payment Service Bank accept money deposits?
Answer: Yes, Payment Service Banks accept deposits from individuals and small businesses

Question: Does Payment Service Bank grant loans?
Answer: Does Payment Service Banks does not grant any form of loans, advances and guarantees (directly or indirectly).

Question: Does Payment Service Bank carry out payment and remittance services?
Answer: Yes, Payment Service Bank carry out payment and remittances services through various channels.

Question: Does Payment Service Bank accept foreign currency deposits?
Answer: No, Payment Service Banks does not accept foreign currency deposits.

Question: Does Payment Service Bank issue ATM cards?
Answer: Payment Service Bank issues debit and pre-paid cards.

Originally posted on May 11, 2021 @ 1:22 pm