Following the new Central Bank of Nigeria (CBN) policy on international money transfers to Nigeria, US Dollars remitted to Nigeria can only be paid out by local banks in US Dollars. It simply means recipients must have in place, US Dollar accounts to be able to access payments, and IMTOs facilitating these payments into Nigeria must upgrade their systems to adapt to the new CBN directives.

The transfer regulation is indeed a long-awaited and broadly welcomed move by the CBN within Nigeria’s remittance ecosystem. Its aim to simplify the receipt and administration of diaspora remittances into Nigeria has serious potential to increase liquidity in the foreign exchange market. And by ensuring that all US Dollar recipients maintained US Dollar accounts (whether opened by themselves or created automatically for them by their local banks), transaction failures would drastically reduce and recipients can exchange their money at the correct market rate. The black market inflation of exchange rates is herein tackled.

Integration, Liquidity & Songhai Exchange Platform

While recipients and remitters benefit from this development in unique ways, International Money Transfers Operators (IMTOs) are a bit at a disadvantage. They are saddled with the enormous task of ‘twerking’ their systems and operations to adapt to the regulation – and to do so quickly. The most obvious obstacle faced by IMTOs in the heat of compliance is integrations with Nigerian banks. Not one bank, but all Nigerian banks if they are to fully serve remitters sending US Dollars to different Nigerian banks.

Another looming challenge is the scarcity of readily available US Dollars to facilitate payments into Nigeria, as well as the logistics of sourcing for these when needed. While the new CBN regulation is an applaudable blow against aggregators illegally trading US Dollars in Nigeria, an underlying liquidity problem springs up for both IMTOs and banks. Poor liquidity slows down the speed at which IMTOs and banks can process US Dollar payments, under-serving remitters and limiting the number of banks IMTO can support.

These are some of the frictions within Nigeria’s current remittance ecosystem tackled by the Songhai Exchange platform. An established Africa-centric remittance technology, the Songhai Exchange (SHE) platform brings to the table a key solution to the weighty problem of multiple-bank integration faced by IMTOs. By shouldering the task of integrating with all Nigerian banks, the Songhai Exchange platform makes it super easy and faster for IMTOs to transact with every Nigerian bank through a single point: SHE.

IMTOs no longer need to worry about the complexity and logistics involved to integrate with all Nigerian banks. Just by integrating with SHE platform, an IMTO gains access to all Nigerian banks to process international transfers while adhering to compliance rules and regulations.

In line with CBN’s mandate for automatic US Dollar account creation for recipients who do not have one by their domestic banks, the Songhai Exchange platform introduced the Auto-Account Creation feature. This unique feature allows Songhai Exchange to create instant US Dollar accounts for beneficiaries, riding on the existing Naira Account KYC of the beneficiary. IMTOs can then process US Dollars transfers to the beneficiary Naira Account number and the money would be received in US Dollars.

The Songhai Exchange platform, on the subject of liquidity, has created fantastic relationships with banks in Nigeria, having a better understanding of liquidity and availability of US Dollars, in the light of regulations, to facilitate IMTOs payments into Nigeria.

Conclusion

Songhai Exchange plays a role in retaining parts of Nigeria’s remittance inflows that would have otherwise been lost due to IMTOs inability to process them into Nigeria. The platform saves IMTOs’ the time and resources required to adapt to the new CBN regulations. IMTOs and Banks are protected from non-compliance with CBN regulations given the Songhai Exchange platform’s award-winning security protocols.

The measures put in place by CBN are paramount for stabilizing the Nigerian economy. Songhai Exchange platform is one of the few players within Nigeria’s remittance space helping such stability materialize through innovative technology and strategic partnerships.