How to Get an International Money Transfer Service License in Nigeria
Introduction
The rapid growth of cross-border transactions and remittance inflows has created a booming demand for International Money Transfer Services (IMTS) in Nigeria. As the largest remittance-receiving country in Sub-Saharan Africa—with inflows exceeding $20 billion annually—Nigeria offers vast opportunities for entrepreneurs and fintechs to operate legally as money transfer operators (MTOs).
However, this is a heavily regulated sector, requiring strict compliance with Central Bank of Nigeria (CBN) guidelines, anti-money laundering protocols, capital requirements, and licensing processes.
This article provides an in-depth, step-by-step guide on how to obtain an International Money Transfer Service License in Nigeria, including relevant legal frameworks, documentation, capital requirements, operational guidelines, and a real-life case study to illustrate the journey.
1. What is an International Money Transfer Service (IMTS)?
International Money Transfer Services refer to companies or platforms licensed to facilitate inbound and outbound money remittances across international borders for individuals and businesses.
Key Players:
International Money Transfer Operators (IMTOs) – e.g., Western Union, MoneyGram
Local Fintech Companies
Deposit Money Banks (DMBs)
Mobile Money Operators (MMOs)
2. Regulatory Framework Governing IMTS in Nigeria
2.1 The Central Bank of Nigeria (CBN)
The CBN is the primary regulator responsible for:
Issuing licenses
Supervising operations
Setting standards for AML/CFT compliance
2.2 Key Regulations
CBN Guidelines on International Money Transfer Services (2014, updated 2020)
CBN Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) Regulations
CBN Foreign Exchange Manual
CBN Revised Guidelines on Licensing of Payment Service Providers
3. Categories of IMTS Licenses
The CBN grants licenses to:
Inbound-only MTOs (senders abroad, receivers in Nigeria)
Outbound-only MTOs
Dual services (inbound + outbound)
Applicants must specify the category in their application.
4. Step-by-Step Procedure to Obtain a License
Step 1: Incorporate a Nigerian Company
Register with the Corporate Affairs Commission (CAC)
Minimum authorized share capital: ₦2 billion (for full IMTO services)
Directors must be fit and proper persons, with at least two having financial sector experience
Step 2: Prepare the Licensing Application
Submit a formal application letter addressed to:
The Director,
Payments System Management Department,
Central Bank of Nigeria, Abuja.
Attach all required documents.
Step 3: Application Documentation
Certificate of Incorporation
Memorandum and Articles of Association (MEMART) – Must state money transfer services as a primary objective
Profile of shareholders, directors, and key officers – Including BVN and passport photographs
Business plan – Including:
Market analysis
Proposed services
Technology infrastructure
Risk management framework
AML/CFT policy
Financial projections for 3 years
Proof of minimum paid-up capital (₦2 billion) – Domiciled with a Nigerian bank
Evidence of Technical Partnership – If applicable (e.g., with Western Union or Ripple)
Enterprise Risk Management Policy
Internal Control Manual
Consumer Protection Framework
Data Protection Policy
Evidence of non-refundable application fee payment (currently ₦500,000)
5. Due Diligence and Screening
The CBN conducts:
Background checks on promoters and directors
Verification of source of capital
On-site inspection of office and tech infrastructure
Review of compliance frameworks and cyber-security readiness
6. Licensing Decision and Approval
If the application is successful, CBN will issue:
A. Approval-in-Principle (AIP)
This is conditional approval subject to:
Deployment of infrastructure
Staff training
Testing of systems
Signing agreements with banks and/or foreign partners
B. Final License
After fulfilling AIP conditions, the applicant is granted the Final Operating License and may begin full operations.
7. Post-Licensing Requirements
Submit periodic returns to CBN
Comply with FX regulations and limits
File Suspicious Transaction Reports (STRs) with NFIU
Submit quarterly compliance reports
Renew AML/CFT certifications annually
8. Technology and Infrastructure Expectations
Your platform must:
Be interoperable with CBN-approved payment gateways
Maintain 99.9% uptime
Have strong encryption and data protection
Include real-time transaction monitoring
Be audited annually
9. Common Pitfalls to Avoid
Insufficient capital base
Poor AML compliance framework
Lack of experience in remittance industry
Falsification of documents or ownership
Inadequate IT infrastructure
10. Case Study: RisePay Fintech Ltd
Background:
RisePay Fintech, a Nigerian startup, sought to partner with a U.S.-based IMTO to offer digital dollar-to-naira remittances to Nigerian bank accounts.
Steps Taken:
Registered with CAC with ₦2.5 billion share capital.
Hired former banking executives as directors.
Built a proprietary blockchain-based payment platform.
Submitted comprehensive business plan and security audit reports.
Partnered with JP Morgan as correspondent bank.
Challenges Faced:
CBN delayed AIP due to poor documentation on internal control.
NFIU flagged one of the shareholders for a historic transaction under review.
Needed to resubmit updated AML/CFT compliance structure.
Outcome:
License granted after 13 months, allowing RisePay to:
Offer remittance services in partnership with U.S. operators
Integrate mobile wallets and crypto-based transfers
Process an average of $2 million in monthly inflows
11. Benefits of Being a Licensed IMTO in Nigeria
Legal operation without fear of regulatory shutdown
Access to CBN forex window
Partnership with local banks and mobile operators
Trust from customers and partners
Expansion into other African countries
12. Frequently Asked Questions
Q1: Can foreign companies apply for the license?
Yes, through a Nigerian subsidiary. Foreign technical partners are welcome but local incorporation is mandatory.
Q2: Can a licensed fintech company offer IMTS?
Yes, but only if expressly licensed by CBN for IMTS operations.
Q3: What is the validity period of the license?
Indefinite, subject to compliance and annual renewals as per CBN guidelines.
Conclusion
Getting a license to operate as an International Money Transfer Service provider in Nigeria is a rigorous but rewarding process. With Nigeria’s growing diaspora remittances and digital economy, properly licensed MTOs have massive potential for expansion and profitability.
Aspiring operators must meet CBN’s regulatory standards, build reliable infrastructure, and remain compliant with AML and consumer protection laws.
Ready to Launch Your International Money Transfer Service in Nigeria?
Getting licensed by the Central Bank of Nigeria is the first step toward building a secure, profitable, and globally trusted money transfer business. But the process is detailed, document-heavy, and requires expert guidance.
At Chaman Law Firm, we help startups, fintechs, and foreign investors navigate the complex licensing process with ease. Our services include:
✅ Business incorporation and regulatory structuring
✅ End-to-end CBN license application support
✅ AML/CFT policy drafting and compliance setup
✅ Technical partnership agreements
✅ Legal advisory for remittance operations
📞Phone: 08065553671, 08096888818
✉ Email: chamanlawfirm@gmail.com
📍 Address: 115, Obafemi Awolowo Way, Allen Junction, Ikeja, Lagos, Nigeria
🌍Click here to learn more about Chaman Law Firm
💼 Chaman Law Firm — Legal Precision for Global Transactions.
🚀 Start your journey to CBN licensing with confidence today.