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May 17.2025
2 Minutes Read

Decoding CBN Licences in Nigeria: A Must-Know for Fintech Startups

Central Bank of Nigeria emblem on glass building, CBN licenses in Nigeria.

The Essential Guide to CBN Licences in Nigeria for Fintech Startups

For tech entrepreneurs and startups venturing into Nigeria's fintech space, understanding Central Bank of Nigeria (CBN) licences is crucial for legal operation. This guide details the different types of CBN licences, their associated costs, and the specifics of what each licence allows.

Understanding the Types of CBN Licences

In Nigeria, startups must apply for specific licences depending on their services, especially when managing funds or processing payments. The main types of CBN licences include:

  • Switching and Processing Licence: Required for companies processing payments (e.g., Paystack, Flutterwave), with a minimum capital requirement of ₦2 billion.
  • Mobile Money Operator (MMO) Licence: Necessary for platforms enabling fund transfers and wallet services (e.g., Paga, OPay), also requiring ₦2 billion in capital.
  • Payment Solution Service Provider (PSSP) Licence: Targeting companies that create payment APIs, with a minimum capital of ₦100 million.
  • Payment Terminal Service Provider (PTSP) Licence: For companies managing POS terminal operations, requiring ₦100 million in capital.

The Cost of Starting a Fintech Venture

Aside from the capital requirements, startups should account for application fees and deposits specific to each licence type. For example, the application fee for the Switching and Processing Licence is ₦100,000, alongside an escrow deposit of ₦2 billion that is refundable once the licence is issued.

Future Insights: Navigating the Fintech Landscape

The fintech landscape in Africa is rapidly evolving, driven by automation and digital transformation trends. Financial regulations are key to maintaining trust and security, especially as fintech companies become integral to the economy. Understanding CBN licences helps startups play a part in creating a robust digital ecosystem.

In conclusion, whether you're an investor eyeing the next big fintech innovation or a startup founder ready to dive into Nigeria's digital economy, being informed about CBN licences is your first step towards success. Embrace the opportunities and be prepared to navigate the challenges that come with building the future of finance in Africa.

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