CBN Mandatory Dual Connectivity for Payment Service Providers: Compliance Requirements Explained

CBN Mandatory Dual Connectivity for Payment Service Providers

Compliance Requirements Explained for PSPs in Nigeria

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The Central Bank of Nigeria (CBN) has introduced a critical regulatory directive requiring Mandatory Dual Connectivity for participants in Nigeria’s payment ecosystem. This policy directly impacts Payment Service Providers (PSPs), payment switches, and other regulated institutions.

The objective is clear: strengthen payment system resilience, eliminate single points of failure, and ensure uninterrupted electronic payment services across Nigeria.

What Is Mandatory Dual Connectivity?

Mandatory Dual Connectivity refers to the requirement for eligible payment institutions to maintain two independent and redundant network connections when accessing payment infrastructure and settlement systems.

These connections must operate independently to ensure that if one link fails, the second connection automatically takes over without disrupting transaction processing.

Why the CBN Introduced Dual Connectivity

With Nigeria’s rapid growth in digital payments, network outages and connectivity failures have become a major risk. According to the CBN, payment disruptions threaten:

• Financial system stability
• Consumer confidence in electronic payments
• Operational reliability of PSPs

Mandatory Dual Connectivity is therefore a proactive measure to improve payment uptime and transaction success rates across the ecosystem.

Who Must Comply With the CBN Directive?

The requirement applies to eligible payment system participants, including:

• Payment Service Providers (PSPs)
• Payment switching companies
• Other institutions connected to Nigeria’s payment infrastructure

If your organization processes or facilitates electronic payments, compliance is mandatory.

Key Compliance Requirements for Payment Service Providers

1. Two Independent Network Connections

PSPs must maintain a primary and secondary connectivity link that do not share the same:

• Network path
• Infrastructure dependency
• Single point of failure

2. Automatic Failover Capability

The backup connection must be live at all times and automatically take over in the event of a failure, ensuring seamless transaction processing.

3. Compliance With CBN-Approved Standards

All connectivity infrastructure must meet technical standards approved by the CBN and relevant payment system operators.

Compliance Timeline and Regulatory Oversight

Compliance with the Mandatory Dual Connectivity directive is subject to regulatory monitoring and verification. Institutions that fail to comply risk penalties and further supervisory actions by the CBN.

Risks of Non-Compliance for PSPs

Failure to comply may result in:

• Regulatory sanctions
• Operational restrictions
• Reputational damage
• Increased regulatory scrutiny

Business Benefits of Dual Connectivity

Beyond compliance, PSPs benefit from improved uptime, reduced transaction failures, stronger SLAs, and increased customer trust. Dual connectivity is increasingly seen as a strategic investment in business continuity.

Final Thoughts

The CBN’s Mandatory Dual Connectivity requirement marks a major step toward a more resilient Nigerian payment system. Payment Service Providers that act early will not only stay compliant but gain a competitive operational advantage.