On 28th January, 2019, the payment systems management department of the central bank of Nigeria issued an exposure draft of its proposed revision of The Regulation On End To End Electronic Payment Of Salaries, Pensions And Other Remittances, Suppliers And Revenue Collections In Nigeria, 2018 which was earlier released in 2014 to stakeholders and the general public for review and general feedback.

Objective: The stated objective of the proposed revision is to align the Nigerian payments system with international best practices by ensuring the availability of safe, effective and efficient mechanisms for conveniently making and receiving all types of payments from any location and at any time, through multiple electronic channels which is projected to reduce the time and costs of transactions, minimise leakages in revenue receipts and at the same time provide reliable audit trails.

Scope & Responsibilities of Stakeholders: In so doing, the regulation spells out the scope, roles, compliance thresholds and events of default of stakeholders in the market.

Duties of the Central Bank: The central bank for example is both promoter, facilitator – given its duty to create and maintain a platform for the effective implementation of the regulation – and regulator of the electronic payment system introduced under the regulation. It assigns roles and responsibilities to stakeholders and where they are non-compliant, specifies sanctions for such noncompliance.

Duties of the Banks: For instance, Deposit Money Banks, Other Financial Institutions OFIs and Mobile Money Operators MMOs Have a mandatory duty to report activities and transactions carried out via their e-platforms to the central bank on a monthly basis using parameters stipulated in the regulation. Failure to provide same as stipulated attract sanctions which make compliance an attractive undertaking.

Regulative Requirements of Payment Solution Service Providers: The regulation also requires all payment solution service providers be licenced to operate as a PSSP by the apex bank.

Responsibilities of Payers / Employers: Stakeholders who are not directly regulated by the Central Bank but having satisfied one condition or the other – in the case of the Payer, have more than 20 employees – are subject to the provisions of the regulation. A payer who employs 20 persons and above, is mandated to adopt a Bank approved e-payment system when paying their salaries and other emoluments such as contributory pension and taxes and indicate their adherence to same in their annual reports.

Responsibilities of Beneficiaries / Employees: Payment Beneficiaries such as employees and pensioners are amongst other things, obligated to report non-compliance with the provisions of the regulation by the payer in the payment of their salaries and other emoluments to the bank so that proper sanctions can be meted out on the defaulting payer.

Conclusion: The regulation in closing provides a channel for resolving disputes arising out of the provisions of the regulation, and concludes with a charge to DMOs to dishonour all unsecured requests for payment by payers not made via electronic channels in a bid to ensure compliance by qualifying organisations.

PLEASE NOTE: Content of this publication is for the general information of the public alone and shall not be interpreted as legal advice. Any queries on the subject may be directed to contactus@tundeadisa.com.

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Ref[1] REGULATION ON END TO END ELECTRONIC PAYMENT OF SALARIES, PENSIONS & OTHER REMITTANCES, SUPPLIERS & REVENUE COLLECTIONS IN NIGERIA, REVISED 2018.