CBN contactless payment guidelines
Exciting News in Nigerian FinTech! 💼💳📱*
The Central Bank of Nigeria (CBN) has just unveiled comprehensive guidelines for contactless payments in Nigeria, bringing exciting possibilities and benefits to the ecosystem.
📜 *Why is this a big deal?*
The adoption of contactless payments in Nigeria has been slowed down due to regulatory ambiguity. This lack of clarity made many banks wary of the fraud risks associated with this payment method. Now that the CBN has issued clear guidelines, we expect more widespread adoption of contactless payments across Nigeria.
What's more, these guidelines open the door for more innovative projects, like the tokenization initiative launched by Providus Bank last year in partnership with Mastercard and Thales. For tech-savvy players like fintechs, we can expect developments like instant provisioning and even a move towards eliminating physical plastic cards, a relevant change in light of the global chip shortage that has driven up the price of card plastic.
From the merchant's perspective, getting into the collections business is now easier. Contactless card readers are much cheaper than Android terminals, which can significantly lower the barrier to entry.
And let's remember the consumer - almost all the Visa and Mastercard cards in the market are already contactless-enabled, allowing for quicker and more convenient payments.
💡 The new framework sets the standards for various stakeholders in this ever-evolving landscape. Let's unpack this:
Issuers - Issuing banks like Kuda, Access Bank and Zenith Bank are to provide customers with the means to make contactless payments. They must ensure these payments are activated with the customer's consent, meet strict security and technical standards, and strictly adhere to transaction limits.
Acquirers - Acquiring banks like Moniepoint, GTBank, UBA, and Fidelity Bank process card transactions on behalf of businesses, ensuring all transactions meet the new guidelines and standards.
Payment Schemes and Card Schemes - Organizations like Mastercard and Visa manage the systems allowing your card to work everywhere. They must ensure these systems are risk-managed and interoperable.
Switching Companies - Entities like Interswitch and NIBSS route your payments and must also ensure system interoperability.
Payment Terminal Service Providers and Aggregators - Companies like Global Accelerex and Interswitch ensure payment terminals work correctly and meet CBN standards.
Merchants - Businesses accepting contactless payments must ensure devices are ready for use, and they are liable for any fraudulent transactions due to their negligence.
Customers - We can opt in or out of contactless payments and must authenticate transactions as needed.
Transaction Limits
All parties must follow CBN's minimum security standards to protect our information. They must also work with CBN-approved transactions and cumulative daily limits for contactless payments. buff.ly/436ngzQ
Currently, the limits are 15,000 per transaction and 50,000 per day. To spend more, you'll have to request it in writing from your bank, taking on the associated risks.
You can read the full guidelines here: buff.ly/46o4pmR for a detailed overview.
These are exciting times for financial technology in Nigeria! Stay informed and tap safe! 😄👋
