Understanding the CBN Payment Solution Service Provider (PSSP) License in Nigeria

The Nigerian financial landscape continues to evolve rapidly, with the Central Bank of Nigeria (CBN) creating new licensing categories to accommodate digital innovation in payments, fintech, and financial inclusion.

One of the key licenses under this framework is the Payment Solution Service Provider (PSSP) License, a crucial authorization for companies facilitating electronic payments, online transactions, and merchant integration in Nigeria.

 What is a PSSP License?

A Payment Solution Service Provider (PSSP) license authorizes a company to provide technology infrastructure and services that enable payment processing, gateway services, and integration between merchants, financial institutions, and customers.

Essentially, a PSSP is the bridge between payment channels (like cards, transfers, wallets) and the businesses that receive those payments.

 Core Activities Permitted Under a PSSP License

Holders of the PSSP license may engage in the following:

1. Payment Gateway Services– Providing electronic payment interfaces for merchants and service providers.
2. Payment Processing– Handling the technical process of transmitting, verifying, and settling digital payments.
3. Merchant Integration & Support– Enabling businesses to accept card, transfer, or wallet payments through APIs or web/mobile interfaces.
4. Transaction Switching (Non-clearing)– Facilitating routing of payment instructions among banks and wallets (without performing settlement).
5. Remittance Processing (Local)– Handling local funds movement between accounts as part of payment services.
6. Value-added Services– Fraud monitoring, transaction analytics, reconciliation, and dispute management.

Regulatory Framework

The PSSP license is governed by:

• The CBN Guidelines on Operations of Electronic Payment Channels in Nigeria,
• The Licensing Framework for Payment Service Providers (2021), and
• The CBN Regulation on Electronic Payments and Collections for Public and Private Sectors.

Key CBN Licensing Requirements

To obtain a PSSP license, an applicant must meet both corporate and financial conditions, including:

1. Minimum Share Capital– ₦250 million (fully paid up).
2. Deposit of Non-refundable Application Fee– ₦100,000.
3. Licensing Fee (upon approval)– ₦1,000,000.
4. Evidence of Technical Partnership– with banks, card schemes, or processors.
5. Three-Year Business Plan– showing financial projections and operational model.
6. IT Infrastructure & Security Standards– including PCI-DSS compliance, data encryption, and disaster recovery setup.
7. Board Composition & Governance Structure– fit and proper directors and management team.
8. Evidence of CBN Sandbox or pilot transaction testing(for some applicants).

Licensing Process Overview

1. Pre-Application Consultation:Engagement with CBN to confirm eligibility and documentation readiness.;
2. Formal Application Submission:With all required documents, share capital evidence, and fees.
3. CBN Review & Due Diligence:Assessment of business model, security architecture, and financial capacity.
4. Approval-In-Principle (AIP):Granted to commence limited operations under supervision.
5. Final License Issuance:Upon full compliance and system validation.

 What a PSSP License Does Not Cover

A PSSP cannot:

• Hold customers’ funds or perform settlement;
• Operate as a wallet or bank;
• Engage in foreign remittance without separate approval;
• Issue cards or perform clearing functions.

For these, additional or alternative CBN licenses such as MMO, PTSP, or Switching & Processing License are required.

 Why PSSP Licensing Matters

Holding a valid PSSP license:

• Builds credibility with banks and merchants,
• Enables direct integration with CBN-approved payment systems,
• Ensures compliance with data protection and anti-fraud standards, and
• Positions your company for cross-border payment innovations.

At 618 Bees, we assist fintechs, payment startups, and investors in obtaining, structuring, and maintaining CBN payment licenses including PSSP, PTSP, MMO, and Super-Agent categories.

info@618bees.com |  www.618bees.com
Compliance. Structure. Growth.

The information in this blog post (“post”) is provided for general informational purposes only, no information contained in this post should be construed as legal advice, nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting on the basis of any information included in, or accessible through this post without seeking the appropriate legal or professional advice from the particular facts and circumstances at issue from a lawyer. This post is protected by intellectual property law and regulations. It may however be shared using appropriate sharing tools provided that our authorship is always acknowledged and this Disclaimer Notice attached