Fintech is a blend of financial services and information technology. Financial technology often referred to as “fintech” is a term used to describe the deployment of technologies to financial services. It is the use of technology to provide financial services. Fintech companies in Nigeria have been at the forefront of Africa’s tech revolution and there are over 200 fintech companies in Nigeria presently.

Recommended reading: Registering your Nigerian Digital Lending Startup with the FCCPC

Fintech Licences In Nigeria

In Nigeria, there are several types of fintech licenses that a company can apply for, depending on the nature of its business. These licenses include:

1. Payment Service Provider (PSP) License: This license authorizes a company to offer payment services like electronic payment solutions, internet banking, and mobile money. The Central Bank of Nigeria (CBN) grants the PSP license. 
2. Payment Terminal Service Provider (PTSP) License: This license authorizes a company to provide payment terminal and point-of-sale (POS) services. In collaboration with the CBN, the Nigerian Communications Commission (NCC) grants the PTSP license. 
3. Mobile Money Operator (MMO) License: This license authorizes a company to provide mobile money services, including electronic wallets, funds transfers, and bill payments. The MMO license is issued by the CBN.
4. Switching and Processing License: This license authorizes a company to run a payment gateway or switching system that links different payment channels, including banks, mobile money providers, and payment processors. The Switching and Processing license is issued by the CBN.
5. Payment Solution Service Provider (PSSP) License: This license authorizes a company to offer payment processing and switching services for electronic transactions. The PSSP license is issued by the NCC in conjunction with the CBN.

Fintech Licensing Requirements

Switching and Processing License

1. Corporate documents include the following:

1. Incorporation documents;
2. Details of ownership and holding company structure (if applicable);
3. Tax Clearance Certificate (TCC) for 3 years (if applicable) and Taxpayers Identification Number (TIN) of the company;
4. Bank Verification Number (BVN), Curriculum Vitae (CV), and means of identification (ID) for the directors and top management (including one independent non-executive director, chairman, and managing director);
5. Business plan and product deployment methodology;
6. Requisite policies and framework;
7. Signed agreements with sub-agents, financial institutions, and business parties; and
8. Evidence of payment card security certification and other relevant payment terminal certification.
9. Application fees etc.

Mobile Money Operator License

Corporate documents include the following:

1. TCC for three years (if applicable) and TIN of the company;
2. Details of ownership and holding company structure (if applicable);
3. Incorporation documents;
4. BVN, CV and means of ID of the directors and top management (including one independent non-executive director, chairman and managing director);
5. Business plan;
6. Requisite policies and framework;
7. Project deployment time; and
8. Signed agreements with its partners.
9. Application fees etc. 

Payment Solution Services (PSS)

Corporate documents include the following:

1. TCC for three years (if applicable) and TIN of the company;
2. Incorporation documents;
3. BVN, CV, and means of ID of the directors and top management (including one independent non-executive director, chairman, and managing director);
4. Requisite policies and framework;
5. Signed agreements with its sub-agents, financial institutions, and partners;
6. Minimum of 50 agents;
7. Evidence of payment card security certification and other relevant payment terminal certification; and
8. Project deployment methodology.
9. Application fees

Payment Terminal Service Provider (PTSP) Licence

 Corporate documents include the following:

1. Tax Clearance Certificate (TCC) of three years (if applicable) and TIN of the company;
2. Incorporation documents;
3. BVN, CV, and means of ID of the directors and top management (including one independent non-executive director, chairman, and managing director);
4. Requisite policies and framework; and
5. Project deployment methodology.
6. Application fees etc.

Payment Solution Service Provider (PSSP) Licence

Corporate documents include the following:

1. Tax Clearance Certificate (TCC) of three years (if applicable) and TIN of the company;
2. Incorporation documents;
3. BVN, CV, and means of ID of directors and top management (including one non-executive director, chairman, and managing director);
4. Signed agreements with its partners;
5. Requisite policies and framework; and
6. Evidence of payment card security certification and other relevant payment terminal certification.
7. Application fees etc.

Regulatory SandBox

The regulatory Sandbox is aimed at stimulating innovation and deepening financial inclusion. To this end, the CBN will review the products during the implementation. Corporate documents required include Incorporation documents; shareholding structure; Project plan, business proposal, and outline of the strategy of the sandbox trial; Evidence of patent rights (if applicable); CV of directors and top management.

In Nigeria, the primary regulatory bodies responsible for fintech licensing and regulation are:

1. Central Bank of Nigeria (CBN): The primary regulatory body for financial services in Nigeria, including fintech firms, is the Central Bank of Nigeria (CBN). The CBN issues licenses for payment services, mobile money, credit bureaus, and switching and processing services.
2. Nigerian Communications Commission (NCC): The NCC is responsible for regulating the telecommunications industry in Nigeria. Additionally, it grants licenses to companies that offer payment solutions and terminal services. 
3. Securities and Exchange Commission (SEC): Nigerian capital markets are subject to regulation by the Securities and Exchange Commission (SEC). It also regulates fintech companies that provide investment-related services, such as crowdfunding and peer-to-peer lending.
4. National Insurance Commission (NAICOM): The NAICOM oversees the Nigerian insurance market. Fintech companies that offer services related to insurance are additionally governed by it. 

These regulatory organizations collaborate to make sure that Nigerian fintech businesses operate in accordance with all applicable rules and laws. To make sure that customers are receiving safe and secure financial services, they also keep an eye on the activities of fintech businesses.

CONCLUSION

Fintech companies must comply with the specific requirements and legal obligations associated with each license. When choosing a fintech license in Nigeria, it’s crucial for businesses to carefully consider the nature of their industry and the relevant regulatory requirements. 

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