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The Central Bank of Nigeria (CBN) has deregulated the Merchant Service Charge (MSC) and is expected to implement a new pricing regime on electronic transactions by the second quarter of the year.
MSC is a fee paid by merchants for e-transactions done through Point of Sales (PoS) terminals.
Dipo Fatokun, CBN Director, Banking and Payment System Department (BPSD), announced that from May 1, the CBN would no longer regulate the MSC, adding that it would be replaced with Interchange Fee regime.
He said as a result of the limitations of the MSC regime and in tandem with the objectives of the Payments System Vision 2020, the CBN, in consultation with stakeholders decided to migrate the payment card to a superior pricing mechanism.
According to him, 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, 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.”