Due to the new directive from the Central Bank of Nigeria (CBN), most operators have been banned from sending money to Nigeria from other countries.
Only three companies – Western Union, MoneyGram and Ria – will be able to continue operations following the drastic decision by the CBN.
A leading online remittance provider, WorldRemit, in common with all other international MTOs, has been instructed by its local correspondents that transfers to Nigeria will no longer be processed and is, accordingly, suspending services immediately.
WorldRemit founder and CEO, Ismail Ahmed said:
"This move is arbitrary, inexplicable and hugely detrimental to the Nigerian diaspora who rely on hundreds of money transfer companies and banks, providing them with choice, convenience and competitive pricing.
Even now, as we suspend our service, there is no clarity on why this sudden change has happened. If it is on the basis of new rules, there was no warning. If it is a re-interpretation of old rules, local correspondent networks and banks should have been forewarned.
This reverses the progress made by the country when the Nigeria Central Bank banned Western Union’s exclusivity agreements that had created a near-monopolistic position in the international money transfer market. Western Union controlled 78% of the market share when CBN outlawed exclusivity agreements with local banks.
It looks like all systems in Nigeria are currently geared against encouraging new entrants and competition in the mobile remittance markets. That is worrying in the extreme."
Until now, money transfer operators operated via partnerships with licensed local correspondents in Nigeria, enabling transfer of funds to local bank accounts – providing a more efficient service than the SWIFT infrastructure.
Worthy to note also is a 2015 memorandum from the Central Bank of Nigeria, stating minimum requirements for companies offering international Mobile Money transfer services to Nigeria.
The guidelines specify that any company offering Mobile Money transfers must have minimum net assets of $1bn and have been operating for more than 10 years.
This will further crumble the services of most operators.
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