Central bank of Nigeria’s new rule is expected to impact remittances through mobile payment

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Annually, Nigeria receives more than $20bn in remittances from migrants around the world. However, The Central Bank of Nigeria (CBN) recently rolled out new guidelines to remain committed to create an enabling environment for international money transfer operators. The initiatives have been intended to avoid any attempt aimed at undermining country’s foreign exchange regime. To protect the greater interest of the Nigerians at home and abroad, CBN has stopped operations of several international MTOs including WorldRemit, an online money transfer service provider that operated through licensed local correspondents’ networks. Under the new guidelines, only three companies namely Western Union, MoneyGram and Ria have been identified as certified operators in Nigeria.

The new guidelines would require a foreign money transfer operator to obtain license from CBN to operate in Nigeria. Additionally, among the prominent conditions to be applied to the international operator included that it must be a registered entity and should be licensed in its home country to carry on money transfer activities. The company intending to operate in Nigeria’s remittance space must have a minimum net worth of $1 million, as per the latest audited financial statement. Also, CBN shall conduct appropriate investigation of the key persons of the proposed money transfer operator to offer license.

The move is expected to create immediate blacklash as Nigerians will have to pay high fees associated with the recognized MTOs. Moreover, this move is likely to impact growth of remittances through mobile payment. According to PayNXT360, Nigeria’s mobile money market was valued at $ 3 billion in 2015, and is expected to post a CAGR of 64% during the forecast period of 2016 to 2020. Also, it would be interesting to watch how Nigerians will embrace Bitcoin to avoid local and international regulations that plague international money transfers.

To know more and gain deeper understanding of mobile payment industry in Nigeria, click here.