[September, 2022] The Central Bank of Nigeria (CBN) has granted Flutterwave, the leading payments technology services provider in the nation, a switching and processing license for electronic payments, as the firm seeks to extend its services across the African country.
Founded in 2016, Flutterwave is a Nigerian FinTech company that provides a payment infrastructure for international retailers and payment service providers across the continent. The platform allows users to accept and transfer payments, create a free eCommerce website, and generate professional invoices, among others.
The S&P license, which includes a refundable ₦2 billion (~USD 4.5 million) escrow into CBN PSP Share Capital as one of its conditions, is widely regarded as the CBN's most important payment processing license.
Prior to the S&P license, Flutterwave was only authorized to conduct business in Nigeria as an International Money Transfer Operator (IMTO) and Payments Services Solutions Provider (PSSP). Therefore, whenever users sent money from the UK to Nigeria, they were leveraging the IMTO license, and if a client used the platform to pay a merchant, they were using the PSSP license. With this newly obtained license, Flutterwave joins the list of other FinTech firms in Nigeria that have a switching and processing license, including ****Interswitch, eTranzact, Unified Payments, TeamApt, and AppZone. Flutterwave's Switching and Processing license enables transactions between banks, FinTech, and other financial institutions, with the ability to handle card transactions, operate in agency banking and provide a variety of payment services without the use of a middleman. The license, according to Bloomberg, comes as the company prepares to list on the Nasdaq and battles accusations of financial wrongdoing, including suspicions of money laundering in Kenya, anomalies with stock options, and employee bullying in its biggest market, Nigeria.
It is worthwhile noting that Flutterwave made a significant effort to create a more streamlined adoption of eNaira, as they revealed on September 14 that merchants on the platform may now accept payments in the Nigerian Central Bank’s Digital Currency (CBDC).The acceptance of eNaira among Nigerians has been slow, and we observed before that the country's government and central bank authorities were exploring measures to enhance its adoption. Fullterwave was quick to announce that its one million merchants already accept eNaira payments from their customers. The fintech company's websites holds the announcement for the merchants about the advantages of using the new payment options.
“Our addition of the eNaira payment method is yet another effort to ensure that when businesses do the hard work of bringing customers, the choice of the payment method will not be a challenge,”
Nigeria is not the only country that combines CBDC development and countrywide payment processing applications. Unlike US, EU and other developed countries, where the process is governed from the top, involves a deep analysis and research, developing countries like Cambogia are taking bottom to top approach to solve immediate issues of inclusiveness and costs. Let's observe which path leads to results.