CBN GUIDELINES FOR TRANSACTION SWITCHING IN NIGERIA.

The Central Bank of Nigeria  (CBN) has zinc April issued new guidelines for transaction switching services in Nigeria to replace previous rules and regulations for Nigerian central switching.
The guidelines reemphasizes that all parties involved in transaction switching in Nigeria need licenses issued by the CBN.
These include Nigerian central switch, switching companies, card issuers and merchant acquirers.
It also clearly establishes the responsibilities of the different parties to transaction switching services provision in Nigeria.
For example, switching companies are to ensure compliance with established standard, open individual networks for reciprocal exchange of transactions/messages; enter into formal agreement with all member institutions and protect the confidentiality of transaction information switched.
They are also to establish adequate security procedures, submit to the CBN security plans and periodic updates, and must have approved business continuity plan.
They have responsibility to report to the CBN information on usage, volume and value of transactions, all frauds or attempted frauds and they must not be issuers of cards or be without a primary site plus business continuity arrangement to ensure fail safe operations.
On the other hand, all member institutions must maintain data base that can handle information relating to cardholders, merchants and their transactions for minimum of 7 years, feed the CBN with reports on usage, volume and value of transactions, settle charges by switching companies as per agreement and remain liable for established frauds with their issued cards arising from card skimming or other comprises of issuers accounting systems.
In the case of Nigeria central switch, it must be guided by five key considerations: Availability, data integrity, performance and reliability, open interface and cost reduction.
Nigeria central switch must be independent of other switching companies, allow connection of all switching companies that meet its requirements and have obtained necessary license from the CBN.
In addition, Nigeria central switch must not own or promote any card business, must be run in accord with international best practices, have approved business continuity plan and maintain data base for minimum of 7 years of transactions.
Also there must be a primary site, a hot backup site and a contingency site as minimum requirements.
The new guidelines also deal with interface specifications, communication and message protocols, and secure interconnectivity.
It also details operating rules and regulations, which include 24hours, 7 days a week service, settlement mechanism and technical requirements.
For example, the minimum services that should be available in ATMs are withdrawal, balance enquiry and pin change.

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