Why Opay, Kuda, Palmpay and others was removed from Banks transfer channel

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NIBSS Directs Banks to Exclude Non-Deposit Financial Institutions from Fund Transfer Channels

Nigerian banks have been instructed by the Nigeria Interbank Settlement System Plc (NIBSS) to exclude non-deposit financial entities, including switching companies, payment solution providers, and super agents, from their NIP fund transfer channels. These channels encompass USSD, mobile banking apps, POS, ATMs, as well as web and internet platforms.

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The NIBSS circular highlights that including non-deposit financial institutions as beneficiaries on NIP funds transfer channels violates CBN Guidelines on Electronic Payment in Nigeria. While these entities are restricted from receiving inflows, they are allowed to process outflows as inflows to banks.

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In summary, the enforcement aims to eliminate Fintechs without banking licenses from banks' fund transfer channels, allowing them to facilitate outward transfers to banks but not receive fund inflows.