NIBSS stops banks from transferring funds to Flutterwave, other fintechs

The Nigeria Interbank Settlement System (NIBBS) has instructed commercial banks to disconnect every non-deposit financial institution from NIBBS Instant Payment (NIP) fund transfer channels.

The affected financial institutions include switching firms, payment solutions service providers, and super agents.

The NIP fund transfer channels include USSD, Mobile banking apps, PoS, ATMs, and web and internet platforms.

The circular said: “Listing non-deposit-taking financial institutions such as switching companies (switches). Payment Solution Service Providers (PSSP), and Super Agents (SA) as beneficiary institutions on your NIP funds transfer channels contravenes the CBN Guidelines on Electronic Payment of Salaries, Pensions, Suppliers and Taxes in Nigeria dated February 2014.”

The NIBBS circular stated that while these financial institutions would be barred from receiving funds, they would be allowed to process payments into banks.

“For clarity, Switches, PSSPs, and SAs may process outward transfers as inflows to Banks but are not to receive inflows as their licenses do not permit to hold customers’ funds,” the circular said.

According to Legit.ng, some of the affected fintechs affected in the ban from receiving fund transfers from banks include; Flutterwave, Xpress payment, Innovectives Kesh and many others.

A fintech, Paystack, has assured its users that the ban does not affect it.

In a post on X, it said: “Hi team, we wanted to reassure you that the recent NIBSS circular does not impact Paystack-Titan or any other Paystack services.

We developed Paystack-Titan in partnership with Titan Trust Bank in a way that allows the service to operate compliantly, and it passed review from NIBSS.”

Another fintech, Piggy Vest, also said it is not affected by the ban. It said: “Kindly note that Piggyvest is not affected by the recent NIBSS circular. Please disregard the misinformation.

All Piggyvest virtual account numbers are provided by our licensed partners and do not fall into any of the listed categories. Your funds remain safe.”