Commercial Banks in Nigeria are expected to adopt the Pan-African Payment and Settlement System (PAPSS) platforms sequel to the Central Bank of Nigeria’s (CBN’s) cash withdrawal limit policy.
The CBN policy limits weekly cash withdrawal across various platforms to N500,000 and N5 million for individual and corporates.
With this development, it is expected that banks, which are already undergoing certification and integration of their processes for onward migration to the PAPSS, will quicken the exercise as more people embrace digital payment.
Last year, the PAPSS kicked off digital payments on the continent with first transactions carried out between FirstBank of Nigeria Plc and Ghana Commercial Bank.
According to a PAPSS report, Nigeria Interbank Settlement System (NIBSS) collaborated with PAPSS, Africa Export-Import Bank (Afreximbank) in partnership with the African Union (AU) and the African Continental Free Trade Area (AfCFTA) to achieve the maiden transaction.
The report noted PAPSS serves as a cross-border payments and settlement platform for the Africa continent.
“It is available leveraging the NIBSS Instant Payment platform for commercial banks, Fintechs, payment service providers, card schemes and other payment industry players to integrate for Intra-African Trade and other economic activities among African countries,” it said.
The report said PAPSS was created to reduce transaction time and cost of cross-border financial services by curbing dependency on hard currency and major unknow transaction delays.
“With the banks at various stages of connection through NIBSS for the PAPSS integration, NIBSS will continuously work with the DMBs who are undergoing certification, integration and migration to the PAPSS to complete the required processes and commence transactions soon,” it said.
According to the CBN, “in compelling circumstances where cash withdrawal above the limits in above is required for legitimate purposes, such requests shall be subject to a processing fee of three per cent and five per cent for individuals and corporate organisations respectively”.
The apex bank also directed that third party cheques above N100,000 shall not be eligible for payment over the counter, while the limit of N10 million on clearing cheques still subsist.
It further directed financial institutions that where the limit set is to be exceeded, to obtain valid means of identification of the payee (National ID, International Passport, or Driver’s License); Bank Verification Number (BVN) of the payee, Tax Identification Number (TIN) of both the payee and the payer from the customer, at the minimum, and upload same on the CBN portal created for the purpose.