CBN advises PSSPs, banks on prevention of e-payment risks

The Central Bank of Nigeria has directed Payments Solution Service Providers(PSSP),Switches and Deposit Money Banks(DMBs), to take steps aimed at reducing operational failures that exposes banks and customers to risks in the electronic payment system.

The apex bank in a circular issued and signed by the Director, Banking and Payment Systems, Dipo Fatokun noted that it observed the growing exposure of banks on payments solution service providers platform, due to operational failures.

It therefore directed that banks give value to customers after settlement in furtherance of its responsibility for effective oversight of the payment system. According to the circular, all banks and PSSP for the purposes of payments under the guidelines on electronic payments of salaries, pensions, suppliers and taxes in Nigeria, should give values to customers after settlement at T+1. The apex bank however said the banks can give exceptions where the paying organizations and/or sending banks pledge collateral against their transactions, for which they require instant value to customers.

Also exceptions could be given when the PSSP scheme operates a scheme collateral arrangement, which is adequate to offset irrevocable exposures. In the event of any shortfall of such collateral arrangement, the shortfall shall be borne by the payment solution service provider

The circular read further “All payments solution service providers should ensure implementation of adequate system exceptions monitoring  tools, including alerts, to aid banks in detecting anomalies that could lead to exposures.

“All payments solution service providers shall jointly determine with participating banks, ICT resource capacity planning for banks transaction levels. In addition, banks and PSSPs shall ensure that their systems are not over stretched by the level of transactions being supported by providing necessary headroom for all critical ICT resource used in facilitating payments services.”