Only CBN-Approved Firms Allowed to Collect Electricity Payments, Says FG

The Federal Government has reinforced rules that only Central Bank of Nigeria (CBN)-licensed firms can collect electricity payments across the country. The Nigerian Electricity Regulatory Commission (NERC) has also imposed strict commission caps on third-party collection service providers (CSPs) and directed electricity distribution companies (DisCos) to re-register all collection partners before December 31, 2025, or face sanctions.

The new framework, contained in the NERC Guidelines for the Engagement of Third-Party Collection Service Providers in NESI, came into effect on November 1, 2025. It aims to eliminate unregulated commission charges and improve transparency in electricity payments, particularly in rural and agency banking channels.

Signed by NERC Vice Chairman Musiliu Oseni, the guidelines standardize payments across USSD, banking apps, PoS agents, and rural vendors, marking a renewed push for cashless electricity payment. This initiative builds on Order NERC/183/2019, which previously required industrial and commercial customers to migrate to cashless platforms by January 2020, and residential MD customers by March 2020.

Only CBN-licensed entities, including banks, Payment Service Solution Providers (PSSPs), Payment Terminal Service Providers (PTSPs), MMOs, switching companies, card schemes, and super-agents, are eligible to operate as CSPs. To register, CSPs must submit: a valid CBN license, CAC incorporation documents, banker’s reference, three years of tax clearance, VAT registration, list of sub-agents, API integration agreement with NIBSS, and a non-refundable N100,000 registration fee. No provider may operate without NERC’s approval, and DisCos cannot engage unregistered partners.

The guidelines classify collection channels into USSD, Banking & Switching, Mobile Payment Services, Agency Services, and Rural Services, with maximum commission limits:

• USSD transactions: N20 for payments below N5,000; N50 for payments at or above N5,000.
• Banking & Switching: Banks/gateways 0.75% (max N2,000); ATMs 1.1% (max N2,000); wallets 1.25% (max N2,000).
• Agency & Rural PoS: Agents 1.5–3.25% (capped at N5,000); kiosks 2% (max N2,000).

CSPs can only earn commissions for collection services and cannot charge for IT support, marketing, or unrelated services. All collection contracts must be prefunded, except for banks and switching firms whose settlements occur on a T+1 basis. Maximum Demand (MD) customers are excluded from third-party collections and must pay directly into DisCos’ accounts.

While the new rules aim to curb arbitrary commissions and strengthen revenue accountability, some agents fear the 3.25% cap and N5,000 transaction limit could push smaller players out of business, particularly in remote areas.

DisCos now face pressure to revalidate thousands of collection contracts with fintech partners and rural cash handlers before the deadline. NERC has warned that any CSP not registered by December 31, 2025, shall cease to operate. Full compliance could significantly reduce revenue leakages, improve liquidity for electricity companies, and help close Nigeria’s long-standing revenue gap in the power sector.