The Nigerian Electricity Regulatory Commission has introduced strict caps on commissions charged by all third-party electricity bill collectors and has directed electricity distribution companies to re-register every collection partner before the end of December 2025. The new framework, which takes effect from November 1, 2025, is designed to dismantle the opaque payment practices that have weakened revenue collection across the power sector for years.
The guidelines, signed by the Commission’s vice chairman, create a standard structure for how Nigerians can pay for electricity across digital banking platforms, USSD channels, PoS agents, and rural collection points. They also enforce binding limits on what those channels can charge customers, marking another effort to strengthen Nigeria’s long-standing push toward cashless electricity payments.
Nigeria first attempted this shift in 2019 when it mandated distribution companies to move industrial, commercial, and major residential users to cashless payment systems. The policy was intended to eliminate revenue leakages and increase transparency, ensuring that payments reached utility accounts without diversion. Despite this, cash transactions remained widespread, especially in rural areas where unregistered agents charged unregulated rates far higher than approved limits. Operators say this practice contributed to deepening the liquidity challenges in the electricity market.
Under the new rules, only organisations licensed by the Central Bank of Nigeria can serve as collection partners. This includes banks, payment processors, mobile money operators, switching firms, card networks, and super-agents. Each partner must meet several conditions before operating, including presenting a valid licence, providing agreements with the relevant distribution company, submitting corporate registration documents, showing three years of tax clearance, providing VAT registration, listing sub-agents, integrating with the national payment infrastructure, and paying a non-refundable registration fee.
The guidelines group collection channels into USSD operations, banking and switching systems, mobile payment platforms, agency channels like PoS and kiosks, and rural agents working in underserved locations. For all these channels, NERC has fixed maximum commissions to prevent arbitrary charges. USSD transactions below N5,000 are limited to N20, while those from N5,000 and above carry a N50 charge. Wallets, PoS terminals, kiosks, mobile platforms, and rural agencies face caps ranging between 0.75 per cent and 3.25 per cent, depending on the channel, with a maximum limit between N2,000 and N5,000 per transaction. The regulator also emphasised that collection partners may only earn fees for bill collection itself. Charging for unrelated services is prohibited.
The commission noted that only banks and switching companies may settle on a next-day basis, while all other collection partners must prefund their transactions. Major electricity customers are excluded entirely from third-party channels and must pay directly into utility accounts.
Industry conversations suggest that rural agents fear the new caps could squeeze out smaller operators working in low-density areas where costs are high and revenue is limited. Distribution companies now face a tight deadline to review and revalidate thousands of existing agreements, from fintech partners to community vendors. Any partner not cleared by December 31, 2025, will be barred from operating.
If fully enforced, this framework could reduce losses, improve liquidity for distributors, and strengthen confidence in the power market. For MSMEs, especially those operating in areas where agents previously charged inconsistent fees, the new rules could help stabilise electricity payment costs and remove one more barrier to predictable business expenses.
