The Central Bank of Nigeria (CBN) has published a revised regulation on direct debits scheme in the payments system in Nigeria. The revised guideline recognizes the existing and emerging multi-channel options for direct debit instructions in Nigeria and takes into consideration recent developments in the Nigerian payments system.
Direct debit as explained by CBN is a cash-less form of financial settlement which facilitates recurring payments. The scheme involves a biller, biller’s bank, payer, payer’s bank and/or a payment service provider. Direct debit allows the biller to collect amounts due from a payer through the payer’s bank as per the instructions or mandates provided by the payer. The service may be deployed on channels provided by the biller through its bank or payment service provider.
The document includes guidelines for the ecosystem participants, control mechanisms for participation in the scheme, consumer protection mandates, business and operational rules for direct debit, indemnity and limitations of liability, penalties for incompliance with rules and, dispute resolution.