Institutions Providing Payment Services
The Nigeria Inter-Bank Settlement System Plc (NIBSS) was set up by the decision of the Bankers Committee
in 1992, as a Banking Industry Shared-Service, to help streamline inter-bank payments and settlement
mechanisms, and to promote electronic payments in Nigeria. Incorporated in April 1993 it commenced
operations on 13th June 1994.
NIBSS is owned by all licensed banks in Nigeria, and the Central Bank of Nigeria. The Board consists of
representatives of banks, two Executive Directors and the Managing Director of NIBSS with Deputy
Governor (Operations), Central Bank of Nigeria, as the Chairman. The shareholding of NIBSS is
periodically realigned based on the volume of payments from participant organisations.
The scope of operations of NIBSS in the Nigerian financial sector is such that fulfils its mandate as enshrined
· in the company’s Memorandum and Articles of Association:
To carry on business as a service oriented institution that provides the mechanism for same day clearing and
· settlement of inter-bank transfers and payments;
To provide infrastructure for the automated processing and settlement of transactions between banks acting
on their own account as regards deposit placements, Treasury Bills transactions, Naira settlement on inter-
· bank foreign exchange transactions;
To initiate and develop an integrated nationwide network for the electronic or paperless payments, funds
· transfer and settlement of transactions.
To provide framework for elevating the level of efficiency in funds transfer services generally
NIBSS is responsible for the management and operation of much of the retail payments infrastructure, as well
as offering some value-add services to payment systems participants
220.127.116.11 NIBSS Electronic Funds Transfer (NEFT)
The NIBSS Electronic Funds Transfer (NEFT) service is widely used by all banks to process inter-bank
electronic funds transfer instructions of their respective customers.
18.104.22.168 Nigeria Automated Clearing System
NIBSS operates the central Nigeria Automated Clearing System (NACS) infrastructure that clears majority
of the deferred net settlement payment systems.
22.214.171.124 Nigeria Central Switch
The national Electronic Funds Transfer (EFT) switch ensures inter-connectivity / interoperability amongst
Banks and licensed EFT Switches in Nigeria, and serves as an international retail payments gateway for
126.96.36.199 NIBSS Instant Payments
NIBSS developed and operates NIP (NIBSS Instant Payments), a real-time account-to-account payment
188.8.131.52 Settlement Services
Private switching companies and the Central Securities Clearing System Plc(the clearing and settlement
system of the Nigerian capital market) rely on NIBSS for the cash settlement of their operations.
NIBSS secured the consent of the Securities and Exchange Commission (SEC) and other major stakeholders
of the Nigerian capital market in 2007 to be the sole processor of shareholders’ dividends.
184.108.40.206 Central Mandate Management System (CMMS)
Central Mandate Management System (CMMS) was introduced by NIBSS to address the problems and
challenges faced by Banks, Insurance, Leasing and Utility Service Providers when handling the
administration and validation of direct debit mandates.
220.127.116.11 NIBSS Intra-Day Exposure System (NIDES)
NIBSS enriches settlement operations, particularly in the banking system with the NIBSS Intra-day Exposure
System (NIDES). It enables all Bank Treasurers and Fund Managers to monitor settlement exposures of their
18.104.22.168 Automated Bulk Clearing Service
NIBSS leverages her expertise in payments service provision and credibility in the Nigeria financial system
to provide EFTservices to select corporate bodies and government agencies directly.
22.214.171.124 Payment Terminal Service Aggregator
NIBSS provides reliable data channel, effective interoperability and ensures higher POS availability.
126.96.36.199 NUBAN Account Verifier
NIBSS provides an online tool for verifying that a NUBAN is valid.
2 NIBSS e-BillsPay
NIBSS eBillPay is an account-number-based, online real-time Credit Transfer product that enables
customers to make payments by leveraging the security provided by the banks. The service also facilitates
electronic bill payments, collections, and purchases
Interswitch is a commercial organisation that offers payments processing services and a switching
infrastructure for payment routing. Itprovides online, real-time transaction switching that enable businesses
and individuals have access to their funds across the 22 banks in Nigeria and across a variety of payment
channels such as Automated Teller Machines (ATMS), Point of Sale (PoS) terminals, Mobile Phones, Kiosks,
Web and Bank Branches
Interswitch’s Electronic Funds Transfer (EFT) switching application, supports major networks including
Verve, MasterCard, and China Union Pay, besides other proprietary networks.
Interswitch also offers AutoPay, a scheme similar to NIP that uses the card/PAN for payment routing. This
scheme is run by Interswitch and uses the same settlement as Verve. The settlement scheme run by
Interswitch has not been formally reviewed as part of this release of PSV2020, but operates a settlement
process that requires collateral to be posted by scheme participants and processes inter-bank settlement on net
basis with the NIBSS settlement services.’.
SystemSpecs offers Remita e-Payment, e-Collection, Payroll and Biometrics end-to-end electronic payment
platform to government entities and corporate organizations.
Remita has been widely accepted and is connected online, to all Deposit Money Banks and a sizeable number
of Micro Finance Banks. Other MFBs and Primary Mortgage Institutions are supported in an off-line model
thereby enabling payment to all financial institutions in the country. In addition to the delivery of funds to
bank accounts, the platform simultaneously delivers reconciled associated schedules to relevant non-bank
bodies such as Tax offices, Pension Administrators, Cooperative Societies and Trade Unions.
Remita accepts single and bulk payment instructions and passes these through the predefined internal work
flow of the organisations. Upon final approval, the payer’s bank account is debited and funds transferred to the
credit of the beneficiary bank. The transaction does not create exposure for the beneficiary bank which would
have received funds before crediting the beneficiary’s account. The payers are able to monitor online, the
status of all their payment instructions which are typically closed between two to six hours.
Payment is considered final upon consummation by the final payment approver. Payment reversal function is
available on the platform as a separate process that can be initiated and authorised by the beneficiary bank
Remita Direct Debit – This module of the platform centrally manages direct debit mandates for fixed sum
debits and Variable amount debits as signed up by the service beneficiary. The mandate forms are approved
once by the paying bank and thereafter automatically processed for payment and credit into Collectors’
accounts on the due dates. Collectors are also able to monitor the status of all their due funds.
Remita is the central payment platform supporting the payments of Federal Government Ministries,
Departments and Agencies under the Treasury Single Account (TSA) programme.
Unified Payment Services Limited otherwise known as Unified Payments® is a card-neutral and optionneutral Payments Service Provider founded in 1997 by a consortium of leading Nigerian banks. Unified
Payments operates as a shared infrastructure for the banking community in Nigeria and Payments Service
Provider within and outside Nigeria, with a mission to be the most preferred e-payment service provider in
Africa. Formerly known as ValuCard Nigeria Limited, the name of the Company was changed in 2012 to
reflect its new business, following a successful transformation from a domestic card scheme to a provider of
payment services supporting different payment options and schemes.
Unified Payments is a Principal & Plus Member of Visa and has contributed to the growth of electronic
· payments in Nigeria through the following business offerings:
Processing, Unified Payments provides a secure and reliable infrastructure that enables Issuers to provide
cards and other payment options to their accountholders or customers and for transactions across different
electronic channels – Internet, Physical Points of Sales, ATMs, Telephone Handsets, etc. Unified Payments
also provides the backbone infrastructure that enables Acquirers to acquire transactions at all acceptance
· channels including Points of Sale and at ATMs. They are thus Issuer-Processor and Acquirer-Processors.
Acquiring, Unified Payments provides acceptance services, enabling merchants to accept cards and other
electronic means of payment for goods and services. Unified Payments has the largest non-bank acceptance
· infrastructure in Nigeria.
PTSP (Payment Terminal Service Provider), Unified Payments has the privileged license of deploying,
monitoring and maintaining Points of Sale terminals to Merchant locations on behalf of other Merchant
Switching: Given their network of links with banks in Nigeria, Unified Payments is also able to provide
switching services between Issuers and Acquirers in Nigeria, thereby significantly reducing connectivity
costs between Issuers and Acquirers as well as increasing the throughput, through a significant reduction in
· potential points of failure.
Value Added Services: Unified Payments provides other value added services like settlement agents,
Dispute management agents, Bills payments, collections, Air time vending and various other solutions that
Other Local Switching Schemes
Other local switching schemes include VIZ Etranzact, UPSL, EMP& 3LINE
Payment Instruments in Nigeria
Nigeria offers the typical forms of payments used within most countries in the world
CBN has recently deployed a new infrastructure (NISS) to support RTGS payments. The new system uses
the SWIFT Y-copy methodology for transmission of payment instructions between NISS and Participant
Banks, allowing banks to support Straight-Through-Processing (STP)for high-value payments – a
significant improvement over the previous system that forced participating banks to manually enter
transaction on-line. In 2012, RTGS payments represented 0.6% by volume, but 75.1% by value of domestic
NISS also supports the Central Securities Depository (CSD) function for Government Securities, a critical
function for creating a flexible Collateral Management solution for payment system resilience.
2 ACH Credits and Debits
The high-volume batch payment method, NEFT, is a typical ACH system that supports both credit and debit
payments. NEFT transactions settle in two of the three daily settlement sessions of the national clearing
system (NACS) operated by NIBSS. Settlement 1 (10:00 hrs.) and Settlement 2 (15:00 hrs.) offers same day
value for ACH credits. There is no value limit (minimum or maximum) on NEFT payments. In 2012, NEFT
transactions continued their strong growth pattern and now represent 38.1% by volume and 9.1% by value of
Cheque processing has been streamlined by the consolidation of the previous 37 clearing centres into one
national automated clearing centre and the introduction of cheque truncation to dematerialise the original
paper instrument into a secure electronic form. As a result of these changes, the cheque processing cycle has
been harmonised into a standard process regardless of branch location, and the cycle reduced from a 3-5 day
cycle to a 2-day cycle. In 2012, cheques represented 49.0% of transaction by volume and 13.1% by value.
The average cheque value has fallen by 48% to 529,000 Naira since 2009 reflecting the cheque limits imposed
NIBSS Instant Payments (NIP)
A new payment scheme was introduced in 2011, offering real-time inter-bank account-to-account electronic
funds transfers. The scheme, operated by NIBSS and offered by all major banks in Nigeria, has met with
overwhelming approval from the user community as witnessed by the impressive adoption rate.
NIP allows the payer to confirm the account holder name before sending funds. It uses the central switch to
pass the payment instructions real-time to beneficiary bank which applies funds on receipt. Settlement
occurs once per day in the NIBSS 3 clearing cycle at 15:30 hrs.
In 2012, NIP represented 8.5% of all payment transactions by volume, and 15.5% by value, and in June 2013
NIPtransaction exceeded cheque payments by volume for the first time.
The monthly figures since June 2012 show the strong growth of NIP transactions (Note: the volumes below
reflect only the NIPpayments between different participating banks and so understate the total volume)
CBN has licenced 26 individual mobile money operators (MMO), allowing them to offer mobile
payment schemes. Nigeria has adopted a ‘bank-led’ model for mobile payments, requiring the mobile money
operator to work with a sponsoring bank. All client funds are held by the sponsoring bank in trust accounts
and customer funds are covered by a deposit insurance scheme of the Nigeria Deposit Insurance Corporation
(NDIC). All mobile money operators are required to provide interoperability to other mobile schemes,
enabled through connection to the Central Switch operated by NIBSS. Adoption has been strong, and in 2012
mobile payments represented 3.0% of payment transactions by volume, although only 0.02% by value
highlighting the usage of mobile money for small value person-to-person flows and mobile air-time top-up.
rd Settlement of inter-scheme flows occurs once per day in the NIBSS 3 clearing cycle at 15:30 hrs.
CBN has determined that sufficient MMOs now exist and has announced an increase in the capital
requirements for new and existing MMOs. It is likely that this will result in fewer new applications and a
potential consolidation amongst existing providers.
There are three card schemes in operation, the international schemes of MasterCard and Visa, alongside other
domestic card schemes such as Verve, Genesis and Freedom cards. Any organisation offering payment
switching services must, by policy, connect to the Nigeria Central Switch to ensure full interoperability across
The overwhelming use of cards in Nigeria is for ATM withdrawals, representing 99.3% of all card
transactions in 2012). ATM transactions are excluded from the overall payment volume analysis, since they
are not payments per se, merely a simpler way of obtaining cash to support cash transactions. However, the
strong growth in ATM transactions indicates a migration to the formal banking sector even though the
resulting payments may be cash.
Use of cards for payments is predominantly by debit card since there is a limited credit culture.
Settlement of net flow from issuer to merchant occurs once per day in the NIBSS 3 clearing cycle at 15:30
hrs. Nigeria operates a non-standard process by remitting funds direct to merchant accounts rather than
through the industry standard approach of funds flowing through the merchant acquirer. This local regulation
was in response to a common complaint by merchants that payments from acquirers were being delayed.
NIBSS, as a neutral party in the card payment value chain, is responsible for remitting the funds to the bank
holding the merchant account.
In addition, CBN has imposed a maximum interchange fee of 125 basis points (1.25%) for all card
transactions (both debit and credit cards) subject to a maximum of N2,000 with the exception of the
hospitality industry where maximum cap of N5,000 is allowed. For ATM transactions, the cardholders pay
no charge which is absorbed by the issuer or paid to the acquirer depending on the nature of transactions (Onus or Not-On-Us) respectively
POS transactions are growing strongly (3.4% by volume and 0.03% by value) driven largely by a focus on
initiatives such as Cashless Lagos. Monthly statistics since July 2012 show a strong growth in POS
However, the deployment, availability and active usage of POS devices continues to be a challenge as highlighted in
the statistics from NIBSS. Many deployed POS devices are not connected or are inactive (no transactions over a one
month period). Several studies on usage of POS terminals have highlighted the numerous challenges such as
telecommunication and power issues, preference for cash by store staff due to the ‘no change’ culture, and lack of user
awareness and acceptance.