Nairametrics ǀ The Central Bank of Nigeria has said that it will stop the regulation of the Merchant Service Charge (MSC) as from May 2017. The MSC is a fee paid by merchants for e-transactions done through Point of Sales (PoS) terminals.
In a circular signed by the CBN Director, Banking and Payment System Department (BPSD), ‘Dipo Fatokun, since the CBN would no longer regulate the MSC, Merchants and Acquirers will henceforth negotiate the MSC.
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” the circular stated.
Giving reasons for the action, Fatokun said the limitations of the MSC regime and the objectives of the Payments System Vision 2020, led the CBN, to consult with stakeholders and decided to migrate the payment card to a superior pricing mechanism, the Interchange Fee regime, which would boost payment card issuance, investment in loyalty programmes and the expansion of acquirer network infrastructure across the country.