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The Central Bank of Nigeria issued a new circular on Tuesday reviewing the process for merchant collection on electronic transactions. Here are the new policies;

  1. Banks shall unbundle merchant settlement amounts and charge applicable taxes and duties on individual transactions as stipulated by regulations.
  2. Merchant service charge has been reviewed downwards from 0,75% capped at N1,200 to 0.5% capped at N1000.

What this means: A careful review of the policy change particularly the unbundling of the settlement amount surreptitiously refer to imposing Stamp duty taxes on individual transactions making up a settlement amount rather than on the full amount.

  • For example, when customers pay for utility bills or any regular transactions they often do this via several payment channels of mobile apps of banks.
  • At the end of the period, these payment channels bundle the amount and sweep into the bank account of the merchant.
  • For example, a payment channel sweeps recharge card transactions amounting to N5 million into the merchant’s account and then pays N50 stamp duty on just the amount being swept.
  • The CBN by this circular is now saying the stamp duty will be paid on the individual amounts making up the N5 million. Thus, in the example above, if there were 1,000 transactions making up this N5 million then the payment channel agent will be expected to pay stamp duty of N50,000 (N50 for each transaction).

Merits and demerits: Some analysts who spoke to Nairametrics on the condition of anonymity explained that the new circular is basically a tax on the volume of transactions and could rake in billions in stamp duty charge for the government.

  • However, it could inadvertently affect the CBN’s drive to promote a cashless society.
  • It could also significantly increase the transaction cost of payment channels as indicated in the example above.
  • Every transaction that terminates on a payment channel could now be subjected to N50 stamp duty reducing their margins on average transactions.

Backstory: Nairametrics believes the government in conjunction with the CBN has decided to pursue this route in a desperate bid to increase in tax revenues. Government revenues are in dire straits and based on several projections on track to fall below targeted budget this year. Nigeria collected N1.49 trillion from Corporate Income Tax, Stamp Duty, and Capital Gains tax in 2018 compared to N1.7 trillion budgeted.

Who could be targeted: The policy targets any FinTech or Payment channel agents in the business of receiving payments on behalf of third parties.

Each payment received on their behalf may attract stamp duty taxes and will have to remit sane to the government. This could create reconciliation issues and may require that these companies review their collection gathering processes.


  1. Our government and financial institution failed us ,just imagine ,ordinary basic amenities ,they can’t provide. Just look at ordinary NEPA light we should be enjoying but its a shame that we are still struggling to have light complete without it going off


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