Fintech Fury: Top Global Remittance Firms Banned by Nigeria's Central Bank

The Central Bank of Nigeria (CBN) has officially approved 47 International Money Transfer Operators (IMTOs), including prominent players like Flutterwave and Interswitch, to facilitate the reception of foreign remittances into the country. This significant development follows a stringent ban imposed by the CBN on unauthorized IMTOs, with a clear directive that defaulters would face severe sanctions. This approval means that only these listed operators are now legally permitted to handle remittances entering Nigeria.

A core component of this new regulatory framework is a revised policy on remittance collection. Under the new laws, Nigerians in the diaspora are mandated to send money exclusively through these approved IMTOs. Crucially, the policy also directs IMTOs and Money Deposit Banks to pay recipients of remittances in foreign currencies, rather than the local Naira. This measure is designed to combat instances where beneficiaries were previously shortchanged by receiving less than the actual Naira equivalent of their remittances. Furthermore, this policy aims to encourage the inflow of foreign remittances, empowering recipients to withdraw foreign currency locally without resorting to the black market for exchange. An analyst, Remi Otuneye, noted that the previous system, despite a reward and cashback mechanism, was plagued by irregularities and fraud, with agents exploiting the under-declaration of real figures to divert undeclared foreign currency to the black market. The new policy seeks to establish a more balanced payment system and curb such fraudulent activities.

Out of the 47 approved IMTOs, 18 are local operators, while the remaining 29 are based internationally. The local list includes notable names such as Colony Capital Limited, eTranzact Limited, Flutterwave, Fortified Fronts Limited, Funds & Electronic Transfer Solution, Moneygram, Interswitch Limited, Naira Gram LLC (operating as NGN GRAM Limited), Nigerian Postal Service (NIPOST), Nouveau Mobile Limited, Pagatech Limited, Paycom Nigeria Limited, Shift Financial Services Limited, Simplify International Synergy Limited, TCF LIMITED, Venture Garden Nigeria, VTNetwork Limited, and Xpress Payment Solution Limited. These local operators are primarily concentrated in Lagos (14), with others in Abuja (3) and Ibadan (1).

The international roster of approved IMTOs shows a strong presence from the United Kingdom (17) and the United States of America (8), along with two from Senegal and one each from Morocco and Belgium. From the US, approved operators include Chime INC., FIEM Group LLC DBA PING Express, First Apple INC., IDT Payment Services INC., Makeba INC., Paypal INC., Remitly INC, and Trans-Fast Remittance LLC. European and UK-based approvals encompass Aftab Currency exchange limited, Azimo Limited, Belyfted Limited, Capremit UK Limited, Cashpot Limited, Centrexcard Limited, CP Express Limited, DT&T Corporation Limited, Funtech Global Communications Limited, Global Currency Travel & Tour Limited, Homesend S.C.R.L, Remit Hub Cafe Limited, Small World Financial Services Group Limited, Transferto Mobile Financial Services Limited (THUNES), Volopa Financial Service, WorldRemit Limited, Xpress Money Service Limited, and Weblink International Limited. Western Union is approved for Morocco, while Immueuble Wari Limited and RIA Financial are approved for Senegal.

Despite the comprehensive list, several popular and well-renowned global money transfer operators were notably absent. Companies such as XE, InstaReM, TransferWise (now Wise), OFX, CitiBank, and Skrill did not make the CBN's approved list. These platforms are often recognized for their competitive rates, transparent fee structures, and strong customer reviews (e.g., Wise with over 8 million users and high Trustpilot ratings, or XE known for low rates and excellent ratings). While Remi Otuneye expressed that "the number approved for remittance is enough" and believed the new policy and close-knit regulation would suffice, the exclusion of such widely used IMTOs could potentially impact the ease and flexibility for Nigerians in the diaspora when sending money home, possibly affecting user choice and convenience.

A practical consequence of the new policy is that anyone wishing to collect remittances from these approved money transfer operators will now be required to have a foreign currency (dollar) account to receive the funds. This shifts the responsibility of currency exchange, potentially giving beneficiaries more control over their funds and the exchange rate they receive, while also ensuring direct foreign currency inflow into the Nigerian economy.