Contactless payments done with bank accounts or digital wallets have a daily cumulative transaction limit of 50,000 naira, and these payments have a single transaction limit of 15,000 naira. The Central Bank of Nigeria (CBN) is in charge of enforcing these regulations.
The number of transactions that can be completed using a payment method that does not require contact will be enhanced by a factor of two on June 27, 2023.
Musa Jimoh, the director of the Central Bank of Nigeria’s (CBN) Payments and Systems Management Department, is the one who communicated this information to numerous financial organizations, including banks and other financial institutions, as well as payment service providers.
Higher-value contactless payments, according to Jimoh, are transactions that surpass the aforementioned limits and must be appropriately confirmed and permitted. This is due to the fact that larger-value contactless payments necessitate a greater level of authorization and verification. He underlined the importance of proper verification and authorisation for these types of financial transactions.
“For these transactions, existing know-your-customer (KYC) requirements and limits on electronic payment channels shall apply,” Jimoh noted. “In addition, limits that exceed the specified daily cumulative limit shall be conducted using contact-based technology.” [An additional citation is necessary] The term “know-your-customer” is an acronym for “know your customer.”
Furthermore, the central bank has published recommendations for making contactless payments. These suggestions state that “banks shall determine appropriate transaction and daily cumulative limits for contactless payments from time to time.” Furthermore, the regulations state that stakeholders have the ability to impose restrictions that are consistent with the limits set by the bank.
Customers will be asked to submit verification in the form of a PIN, mobile code, biometric identifier, or other similar identifiers before making higher-value contactless payments, according to the Central Bank of Nigeria (CBN). However, if a client’s contactless payment transaction does not exceed the daily and per-transaction limits, the customer may not be required to submit authorization in the form of a PIN, token, or biometrics.
In a following statement, the Central Bank of Nigeria (CBN) stated that “stakeholders shall implement a risk-based approach to setting volume and transaction limits.” The Know Your Customer (KYC) due diligence performed throughout the onboarding process will serve as the foundation for identifying the risks connected with a customer.
Furthermore, all parties involved were required to provide clients with the option of limiting the total number of transactions that they would carry out. This was a requirement imposed on all parties involved in the transaction. These constraints, on the other hand, cannot be bigger than the maximum limitations set at distinct moments in time.
“Clients who wish to conduct transactions in excess of the maximum limit must submit a written request to the bank, as well as provide indemnity indicating the risks involved in the transaction.” Although the bank is required to provide clearance, the CBN has stated that this is subject to the bank’s own internal risk management criteria.
The Nigerian central bank stressed that the suggestions were made to further its goal of defending the safety and stability of the Nigerian financial system and building a robust and stable payments system. Furthermore, the central bank is aiming to create a resilient and stable payment system. This action was done to meet the demands of its responsibilities.