By Modupe Gbadeyanka
From Monday, May 1, 2017, the Central Bank of Nigeria (CBN) said it would no longer regulate the Merchant Service Charge (MSC).
Instead, it would be implementing a new pricing regime on electronic transactions.
MSC is a fee paid by merchants for e-transactions done through Point of Sales (PoS) terminals.
Explaining the reason for this development, the apex bank noted that it is due to the limitations of the MSC regime.
It added that it is also with the objectives of the Payments System Vision 2020.
The CBN pointed out that it has met with stakeholders in the industry on how to migrate the payment card to a superior pricing mechanism.
Speaking on this, CBN Director, Banking and Payment System Department (BPSD), Mr Dipo Fatokun, said the new pricing regime would boost payment card issuance, investment in loyalty programmes and the expansion of acquirer network infrastructure across the country.
In a document entitled: Circular on the Implementation of the Interchange Fee, Mr Fatokun said, “With the introduction of the Cash-Less Nigeria Project and the release of the Guidelines on PoS Card Acceptance Services, the CBN outlined the MSC and the modalities for the payments system.
“This had enhanced the issuance and utilisation of cards transaction in the country and brought structure to the compensatory mechanism for parties involved in the transaction.
“With effect from May 1, 2017, the CBN will no longer regulate Merchant Service Charge (MSC). The interchange fee regime will replace the MSC. Merchants and Acquirers will henceforth negotiate the MSC, while the CBN will control the interchange fees paid by the Acquirers to the Card Issuer and other regulated service providers, as defined by the CBN.”
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