BEVERLY HILL, January 14, (THEWILL) – In pursuit of financial service innovations within the digital space of its mandate, the Central Bank of Nigeria (CBN) has unveiled frameworks for implementing two policy initiatives meant to achieve this objective.
In two related announcements on its Website entitled “Framework for Regulatory Sandbox Operations” and “Framework for Quick Response (QR) Code Payments in Nigeria”, the CBN said it is committed to innovations that enhance payment systems and guarantee their safety and security.
The Bank said it will pursue new and more flexible ways of engaging with the industry to meet increasing consumer appetite for payment solutions and emerging disruptive technology in the financial services space.
It said this would enable it to stay abreast of innovations while promoting a safe and efficient payment systems without compromising on the delivery of its mandate.
“In view of increasing consumer appetite for payment solutions and emerging disruptive technology in the financial services space, the Central Bank of Nigeria (CBN) has deemed it pertinent to ensure new and more flexible ways of engaging with the industry.
“One of the options being the use of a Regulatory Sandbox which is a formal process for firms to conduct live tests of new, innovative products, services, delivery channels, or business models in a controlled environment, with regulatory oversight, subject to appropriate conditions and safeguards.
“This would enable the Bank stay abreast of innovations while promoting a safe, reliable and efficient Payments System to foster innovation without compromising on the delivery of its mandate.
“This Framework, therefore, defines the establishment, rules and operations of a Regulatory Sandbox for the Nigerian Payments System to promote effective competition, embrace new technology, encourage Financial Inclusion and improve customer experience, with a view to engendering public confidence in the Financial System,” the central bank explained in the Framework for Regulatory Soundbox Operations.
According to the announcement, the objectives of the Regulatory Sandbox Operations in Nigteria include to increase the potential for innovative business models that advance financial inclusion as well as to reduce time-to-market for innovative products, services, and business models.
Additionally, it is aimed to increase competition, widen consumers’ choice and lower costs; ensure appropriate consumer protection safeguards in innovative products; and clearly define the roles and responsibilities of stakeholders and the operations of the Sandbox for the Nigerian Payments System industry.
Other objectives are to ensure adequate provisions in regulations to create an enabling environment for innovation without compromising on safety for consumers and the overall payments system; and to provide an avenue for regulatory engagement with FinTech firms in the payment space, while contributing to economic growth.
Regarding the “Framework for Quick Response (QR) Code Payments in Nigeria”, the CBN explained that the initiative was “in furtherance of its mandates to ensure the safety and stability of the Nigerian Financial System, promote the use and adoption of electronic payments and foster innovation in the payments system.
“These codes can be used to present, capture and transmit payments information across payments infrastructure.
“The technology further enables the mobile channel to facilitate payments and presents another veritable avenue for promoting electronic payments for micro and small enterprises.”
It added that the policy initiative aims to ensure the adoption of appropriate QR code standards for safe and efficient payments services in Nigeria.
“The Bank may also approve the implementation of any other QR Code Standard, provided it meets the prescribed security requirements within the framework, demonstrates interoperability with other existing implementation in the industry and/or cost benefits to end-users (merchants and customers)”, the Bank stated in the announcement.
About the Author
Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.
