23/10/2024
HOW TO SET UP A BILL PAYMENT COMPANY IN NIGERIA.
To operate a bill payment company, the entity must either be a CBN licensed Payment Service Provider (PSP)/Financial Institution or must enter into a partnership with an already licensed PSP as it cannot legally operate without either.
Individuals, groups, corporate entities, and foreign investors are eligible to set up a bill payment company. Where the company does not aim to be licensed as a PSP, it may bypass some corporate governance regulations, such as those concerning share capital, escrow funds or director qualifications. However, where the company seeks a PSP license, it must adhere to the applicable regulatory requirements.
A licensed Payment Service Provider (PSP) must execute a Service Level Agreement (SLA) with the biller, outlining their roles, obligations, minimum service delivery standards, and penalties for breaches. The SLA must be reviewed periodically to stay aligned with industry and regulatory changes.
Billers must confirm transaction completion to the payer, and PSPs must implement proper change management procedures, including maintenance schedules, emergency upgrades, and notification processes.
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