In exercise of its powers under the Central Bank of Nigeria Act, (“CBN”) issued the Guidelines for Licensing and Regulation of Payments Service Holding Companies in Nigeria (the “Guidelines”). This is a follow up to the approved new licence categorizations for participants in the payments system, issued by the CBN on 24 May 2021 which requires companies desirous of operating more than one licence category to set up a Payments Service Holding Company (PSHC), clearly delineating the activities of its subsidiaries. The rationale behind this arrangement is to prevent commingling of activities, facilitate management of risks and enable the CBN exercise adequate regulatory oversight on all companies operating within the group. The Guidelines provide clarity to players in that space who may be desirous of providing more than one category of payment service. A significant point to note is that PSHC’s can, subject to the prior approval of the CBN, acquire (controlling) interests in permissible financial and/or technology companies. The implication of this, which is laudable, is that there would be opportunities for players in the financial and technology sectors to broaden their scope of operations and enhance productivity for overall positive impact on the economy.
