Payment processors threaten Verve suspension as Interswitch alleges untraceable transactions

 



The coalition of licensed payment processors, acquirers, and Point of Sale (POS) operators in Nigeria have threatened a total suspension of Verve  card transactions. The ultimatum, which threatens to disrupt millions of daily consumer transactions, centers on allegations of illegal exclusivity practices, monopolistic overreach, and systemic non-compliance by Verve International and its parent company, Interswitch Limited.


The coalition, operating under the umbrella of the Association of Point of Sale Service Providers, detailed their grievances in an official protest letter addressed to the financial and competition regulators. The service providers are demanding immediate, decisive intervention from both the Central Bank of Nigeria (CBN) and the Federal Competition and Consumer Protection Commission (FCCPC).


According to a statement signed by the association’s Communications Consultant, Yomi Idowu, the payment infrastructure players claim they have been forced into an unsustainable corner by the persistent and anticompetitive behavior of the digital payment giants.


Allegations of Monopoly and Regulatory Breaches

At the core of the dispute is the allegation that Interswitch and Verve are maintaining an ironclad, exclusive monopoly over the processing of Verve card transactions. Industry stakeholders argue that this practice directly violates Section 72 of the Federal Competition and Consumer Protection Act (FCCPCA) of 2018, which strictly prohibits the abuse of a dominant market position.


Furthermore, the coalition stated that the current operational model runs foul of multiple clauses within the CBN’s Guidelines on the Operation of Electronic Payment Channels. Specifically, they accuse Interswitch of inflating scheme fees well beyond the regulated Merchant Service Commission (MSC) caps permitted for acquirers under current central bank frameworks.


The payment processors argue that these uncompetitive structures actively erode the capital base of participating financial institutions, forcing third-party processors and switches to bear heavy operational burdens without fair compensation.


"This decision has become unavoidable due to the persistent and escalating unlawful conduct of Verve International and Interswitch Limited," the association stated. "Their actions jointly undermine the integrity of Nigeria’s payments ecosystem, erode the capital base of participating institutions, and violate several regulatory requirements."


The Threat to Financial Inclusion

The timing of the ultimatum presents a significant threat to the Nigerian retail economy. Over the last decade, Verve has grown to become a dominant domestic card scheme in Nigeria, heavily utilized by low-and-middle-income consumers for ATM withdrawals, web payments, and POS terminal transactions.


The service providers noted that independent processors, switching companies, and POS agents contributed immensely to building and scaling the market acceptance of Verve cards. They emphasize that this nationwide expansion was executed at an enormous cost to independent fintech operators, in compliance with the CBN's financial inclusion mandates, but without any infrastructure subsidies from Interswitch.


While competing global card schemes operating in Nigeria have long abolished exclusivity models to foster a healthy, multi-switch environment, the coalition alleges that Interswitch has refused to open up its architecture. If the payment processors follow through on their threat to stop accepting, acquiring, and routing Verve cards, millions of active cardholders nationwide could find their plastic tokens instantly rejected at checkout counters and agent locations.

Awaiting Regulatory Action

As the tension escalates, all eyes have turned to the apex bank and the FCCPC. Observers within the fintech ecosystem warn that a prolonged standoff or an actual suspension of services could trigger widespread panic, reverse gains made in the cashless policy drive, and severely damage public trust in electronic payment channels.

As of press time, neither Interswitch Limited nor the Central Bank of Nigeria has issued an official response to the association's ultimatum.


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