Nigeria’s Central Bank Awards PSSP License to Fintech Start-Up

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  • Nigeria’s central bank has awarded the startup a PSSP licence, enabling it to operate as a payment solutions service provider within the country.
  • This serves as a demonstration of the Nigerian central bank’s commitment to supporting fintech startups in the country.

Nigeria’s central bank, the Central Bank of Nigeria (CBN), has recently shown its commitment to supporting fintech startups in the country through its decision to award a Payment Solutions Service Provider (PSSP) license to fintech startup, Fincra.

This comes six months after the bank issued Fincra an approval-in-principle. This licence falls within the relatively new categorization of licences introduced by the apex bank in December 2020, which confers financial institutions the legal right to “engage in payment processing gateway and portals, develop payment solutions or merchant service aggregation and collections services”.

Founded in 2021 by Wole Ayodele, multiple-time founder and co-founder of the crypto exchange platform Quidax, Fincra was built to solve the infrastructure problems associated with fintech startups on the continent.

“We are thrilled to have received this licence from the Central Bank. This licence is a huge step forward for us, and it opens up many new opportunities for growth and expansion for our customers and us,” said Ayodele, in a public release by the company.

The company’s mission is to solve the infrastructure problems associated with fintech startups on the continent. With this license, Fincra will now offer its range of payment services, giving businesses access to the most secure local offline and online payment channels to scale their businesses.

Fincra enables businesses to plug into its proprietary technology to make and receive local and international payments. Fintechs can also use Fincra’s APIs to build and scale cross-border payment solutions quicker than building from scratch. The company’s website states, “With this licence and our PCI DSS certification, Fincra will now be able to offer its range of payment services, giving businesses access to the most secured local offline and online payment channels to scale their businesses.”

Fincra team [Photo/ Fincra]
Fincra’s PCI DSS certification is a validation of the company’s commitment to providing a secure platform for businesses to conduct transactions. This, coupled with the PSSP license, gives Fincra the legal backing to operate as a payment solutions service provider in Nigeria and also opens up new opportunities for the company to expand its services to other African countries.

Read: Africa: Scramble for digital payments solutions intensifies

The CBN’s decision to award the PSSP license to Fincra is not only beneficial for the startup but also for the Nigerian economy as a whole. Fintech startups like Fincra are helping to spur economic growth by providing businesses with secure and efficient payment solutions. In addition, the CBN’s support for fintech startups also helps to attract foreign investment to the country, which in turn creates jobs and boosts economic growth.

Nigeria’s startup ecosystem is rapidly growing, with statistics showing a significant increase in the number of startups, investment, and innovation in recent years. According to a report by the Nigerian Communications Commission, the number of active startups in Nigeria has increased by over 50 per cent in the past year, with a total of 10,720 active startups in the country.

This growth in the number of startups is also reflected in the level of investment in the ecosystem. In 2020, Nigerian startups raised a total of $191 million in funding, a significant increase from the US$75 million raised in 2019. This trend is expected to continue, with many experts predicting that Nigeria will become one of the top startup ecosystems in Africa in the coming years.

One of the key drivers of this growth is the increasing focus on technology and innovation in the country. Nigerian startups are increasingly leveraging technology to solve problems and create new opportunities, with the fintech sector being a particularly strong area of growth. In 2020, fintech startups in Nigeria raised a total of US$76 million in funding, with the sector accounting for 40 per cent of all funding raised by Nigerian startups.

The government’s role in supporting the startup ecosystem is also crucial. The Central Bank of Nigeria (CBN) has been particularly active in this regard, with the recent introduction of the Payment Solutions Service Provider (PSSP) license.

Nigeria’s Central Bank, the Central Bank of Nigeria (CBN), has been actively supporting fintech startups in the country in recent years. In addition to awarding the Payment Solutions Service Provider (PSSP) license to fintech startup Fincra, the CBN has also provided support to other startups through a variety of initiatives and programs.

One example is the CBN’s “Innovative Business Ideas and Entrepreneurship Development” program, which provides funding and support to startups in the country. The program focuses on promoting innovation and entrepreneurship in Nigeria and has provided funding to a number of fintech startups in the country.

The CBN has also established the Nigerian Electronic Fraud Forum (NeFF) which aims to protect the Nigerian banking system from electronic frauds. The forum is made up of banks, regulators, law enforcement agencies and other stakeholders. This is a great initiative that helps to secure the banking system and promote trust in electronic transactions.

Another example is the CBN’s partnership with the Nigerian Inter-Bank Settlement System (NIBSS), which operates the Instant Payment (NIP) platform. This partnership has enabled the development of a range of fintech solutions that provide secure, efficient and affordable financial services to the Nigerian public. This partnership has also helped to increase access to financial services in the country, particularly in rural areas.

In conclusion, the PSSP license awarded to Fincra is a significant step forward for the company and a testament to the hard work and dedication of the team. It also serves as a demonstration of the Nigerian central bank’s commitment to supporting fintech startups in the country. With this license and its proprietary technology, Fincra is well positioned to continue to provide businesses with secure and efficient payment solutions and to spur growth in the fintech industry in Africa.

Read: Eastern Africa startups raised $1.2 billion in 2022

Albert is a Chemical Technologist and Author. He is passionate about mining, stock market investing, Fintech and Edutech.

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