NIBSS: Nigeria Inter-Bank Settlement System

NIBSS: Nigeria Inter-Bank Settlement System

NIBSS

The Nigeria Inter-Bank Settlement System (NIBSS) was set up in 1993 to improve the way banks handle payments between each other. 

This has made NIBSS a key player in the money transfer space, and it is crucial for anyone involved in financial technology (Fintech) to understand the technology behind it and its practical applications. 

In this article, we’ll break down what NIBSS is and what it aims to do: 

– We’ll explain NIBSS’s main goals as a company that helps with payments and transactions. 

– We’ll explore the different things that NIBSS offers, like platforms, products, and services. 

– We’ll also investigate how NIBSS is vital for important financial systems like BVN, NIP, and eBillspay.

By the time you finish reading this article, you’ll have a clear understanding of how NIBSS works and how it can be a useful part of your Fintech projects, giving you some advantages along the way.

What is the meaning of NIBSS?  

NIBBS stands for Nigeria Inter-Bank Settlement System plc. It is a financial infrastructure company that enables banks, financial institutions, and other stakeholders in the Nigerian financial ecosystem to handle things like sending and receiving money between banks. 

Is NIBBS important? 

NIBSS serves as the backbone of secure interbank transactions and payment processes, without which the entire financial ecosystem would encounter significant challenges. Without the presence of NIBSS, the landscape of financial transactions within the country would lack the level of safety, ease, and effectiveness that is currently enjoyed.  

NIBSS’s advanced technology ensures security against fraud through dynamic codes and encryption. It shields funds and the financial network’s integrity. 

Its role in inter-bank settlements accelerates fund movement, aided by real-time transfers via the NIP platform. This smooth process bolsters businesses, individuals, and economic activity. 

Furthermore, NIBSS simplifies financial interactions, removing complexities in transactions like purchases, bill payments, and fund transfers. This enhances user experience and promotes financial inclusion. 

Who owns NIBBS? 

According to their website, NIBBS is owned by the Central Bank of Nigeria (CBN) and all licensed Deposit Money Banks (DMBs) in Nigeria. The Board consists of the Deputy Governor, Financial System Stability, Central Bank of Nigeria, as the Chairman and Representatives of the stipulated Banks. 

What are Deposit Money Banks (DMBs)? 

As the name implies, DMBs are financial institutions that primarily accept deposits from individuals, businesses, and other entities. They provide a range of banking and financial services like savings and current accounts, loans, credit facilities, payment services, and more. For Example, First Bank, Guarantee Trust Banks, Zenith Bank, and other traditional banks in the country.  

Payment Services Provided by NIBSS 

The services crafted and provided by NIBSS, serve as fundamental tools that contribute to the seamless and technologically advanced financial ecosystem of Nigeria. These services are; 

NIBSS PAY  

NIBSS PAY is a front-end application that processes bulk payments for remittances, salaries other multi-beneficiary payment purposes. 

The way this product works is like this: it takes money from one account and puts it into another one or even into several accounts. The account that gives away the money is called the ‘Funding Account.’ This account is set up by the Customer’s Bank on the NAPS platform. Alternatively, the NEFT & NIP platform can also be used to manage a lot of payments at once.

EPCCOS

Electronic Pension Contribution Collection System (EPCCOS) is a user-friendly self-service electronic pension collection platform that facilitates the easy upload and transfer of pension remittance schedules to the PFCs and PFAs. 

EPCCOS is like a digital storage place where information about pensions is kept. It helps everyone involved in the pension process – the Employer, the Fund Administrator, and the Custodian – work together smoothly. This system keeps track of the schedules for sending pension money every month. It also makes sure that the money gets to the right place for the employees’ pension accounts. 

NACS 

NACS is the ‘Automated Clearing System’ of the entire banking and financial industry for both electronic instruments and derivatives/images paper-based instruments (Cheques). 

Its sub-services include:  

  • Automated Clearing House (ACH) 
  • Settlement Services  
  • Funds Sweeping Service.  
     

NIBSS Instant Payments (NIP)

NIP is an efficient person-to-person (P2P), person to business (P2B), business-to-business (B2B) funds transfer service that guarantees instant value to beneficiaries 

NIP, helps banks move money between accounts quickly and in real-time. It’s like sending money from one bank account to another, but it happens instantly and online. This system allows banks to offer their customers the ability to transfer money in real-time using digital methods like the Internet and mobile apps. It’s a way to make transactions happen fast and easily without waiting for a long time. 

Collection Services offered by NIBSS 

mCash+ 

mCASH+ leverages the NIBSS Instant Payments (NIP) infrastructure for immediate fund delivery to Merchants’ accounts. The solution is available for Bills, Web, and POS payments. 

When someone who wants to pay uses their phone number, the system gets their bank and account numbers by dialing a specific code or using a push service. This process is free and doesn’t use any of their mobile data. The mCASH USSD session works on all types of mobile phones, whether they’re simple feature phones or advanced smartphones. This means anyone can use it, and it won’t cost them any money to use the service.

CentralPay 

CentralPay is a payment gateway solution that enables online payments through the web pages of e-commerce and online merchant enterprises. With CentralPay, these merchants can accept popular payment cards on their platforms. 

The merchant’s online store connects with the CentralPay service using API integration. This helps them handle transactions smoothly. 

For payments with cards like MasterCard, Visa, or Verve, the Card Schemes process the payment. This combines the card processing systems from Interswitch and UPSL. 

For payments from bank accounts, customers can use methods like One-time Password (OTP), Internet Banking, or mCASHPAY. This last method uses the NIP platform to make sure payments are settled in real time.

e-BillsPay 

e-BillsPay is an electronic bill payment platform that facilitates the payment of Bills, Fees, Levies, Premiums Subscriptions, etc. by the banking public through electronic payment channels provided and managed by Banks 

e-BillsPay serves as a bridge between billers and customers. It checks the information with billers to make sure it’s accurate and lets customers know when payments are successful. It also connects to the bank, showing customers the list of billers and giving them a receipt after they’ve successfully paid. 

NIBSS Direct Debit (NDD) 

NIBSS Direct Debit (NDD) is a data repository for financial and non-financial mandate instructions as well as other affiliated services issued by a subscriber to a biller, service provider, or an institution.

Central Mandate Management System (“CMMS”) features a calendar system that figures out when a mandate instruction needs to be activated. This setup is done by both a subscriber and an institution. These mandates can be in paper or electronic form. A feature called Direct Debit (ADD) lets the system remotely take money from a bank account. This happens through CMMS and is set up in advance based on the type of mandate: 

1. Fixed Mandate: This involves fixed amounts of money taken from the subscriber’s bank account(s) at regular intervals. 

2. Global Standing Instruction: This is used to recover funds from multiple bank accounts when there are defaults. It uses the subscribers’ BVN (Bank Verification Number). 

3. Variable Mandate: With this type, the amounts and the frequencies of money taken from the subscriber’s bank account(s) can vary. 

NIBSS Universal Switch (NUS)

This is an aggregation and interconnection of all POS device terminals deployed by Banks and other licensed card schemes in Nigeria. 

A Payment Terminal Service Aggregator (PTSA) makes sure that all the point-of-sale (POS) devices used for payments follow the same rules and work the same way. This is done by certifying these devices through a process called terminal certification. By doing this, it ensures that these devices are always ready to use and work the same everywhere in the industry.

NQR Payment 

It is a secure QR-code-based payments and collections platform designed for merchants and customers to receive and make payments for goods and services.  

Imagine you’re at a store and you want to pay for your items. The store gives you a special code called NQR (Quick Response Code). You use your phone’s banking app to scan this code. Before confirming the payment, you check if the store’s information is correct and enter the amount you need to pay. Once you’re sure, you say “yes” to make the payment. The store then gets a message saying the payment was successful. 

Data and Identity Services offered by NIBSS 

Name inquiry  

Name Enquiry service allows a payer to confirm the accuracy of the Bank customer’s account details on a payment or non-payment platform before conducting a financial or non-financial transaction.  

There are three kinds of services for checking names: 

1. Name Enquiry Vanilla: This service is used for checking a single name, but it can check up to 10 different accounts at once. 

2. Name Enquiry with Picture: With this service, you not only get the name linked to a particular account number, but you also get a picture. This is only for personal accounts that are active and in use. 

3. Bulk Name Enquiry: This service is for checking a lot of names at once. You can check up to 500,000 records or a file size of up to 10 megabytes. It gives you the first, middle, and last names of valid account numbers. 

Verify Now 

VerifyNow is a service designed to facilitate the seamless verification of the Aliveness and Presence of individuals. 

This service uses a person’s fingerprints to check if they are really the same person who has a BVN. BVN is like a special ID for banking. It helps confirm that the person is alive and at the place where the check is happening. NIBSS works with banks and authorized partners to do this check at specific places all over the country.

USSD Validation Services (*565) 

565 is a USSD service from Nigeria Inter-Bank Settlement System (NIBSS) Plc in collaboration with all Banks offering their customers the next level of convenience and speed in accessing transaction information. 

With the NIBSS 565 code, you can; 

  • Check your Bank Validation Number (*565*0#) 
  • Validate your Bank Verification Number (*565*1#) 
  • Track your NIP transactions (*565*5#) 
  • Validate your insurance policy (*565*11#) 

BVN in Nigeria

BVN, or Bank Verification Number, is a special identification number in Nigeria’s banking system that is linked to your personal information. BVN uses unique details like your fingerprints and facial image to make sure it’s really you accessing your account, adding an extra layer of security. 

NIBSS oversees the entire BVN system and ensures its smooth functioning. Getting your BVN is straightforward: 

  • Visit your bank’s branch. 
  • Fill out a form for BVN enrollment. 
  • Provide your fingerprints and a picture of your face for their records. 
  • You’ll get an acknowledgment slip with a transaction ID. 
  • After about a day, your BVN is created, and you’ll receive an SMS to collect it. 

Note: An individual can have only one BVN 

Banks and NIBSS

NIBSS has joined forces with well-known financial institutions in the country, such as Access Bank, UBA Bank, Sterling Bank, and GT Bank. These partnerships go beyond just regular banks; they also include regulators, private switching companies, merchant banks, super agents, payment solution providers, and other important parts of the financial system in the country. 

Fintech and NIBSS

The integration of NIBBS’s offerings can significantly improve your operations, delivering heightened efficiency, security, and marveling convenience.  

Final Thoughts

 In Nigeria’s financial world, NIBSS plays a pivotal role by providing technology solutions that ensure safe, efficient, and seamless transactions. This is especially crucial for fintechs aiming to navigate the complex financial landscape. NIBSS enhances security through biometric technology, accelerates transactions with real-time capabilities, and simplifies processes for smoother user experiences. To learn more, visit NIBSS’s official website for comprehensive information. For simplified financial guidance during challenging times, subscribe to our newsletter – because we’re here to help when financial paths get tough.

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