In furtherance of efforts to liberalise the Foreign Exchange Market, ensure liquidity and make foreign exchange more readily available to consumers, the Central Bank of Nigeria (CBN) has licensed Flutterwave, Nairagram, Paypal, Pagatech, Interswitch and e-Tranzact as  International Money Transfer Operators IMTOs.

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The apex bank recently released the list of 60 firms approved as International Money Transfer Operators (IMTOs) to render international money transfer services.

Others on the list include Nigeria Postal Service, (NIPOST),  First Apple , VTNetwork, e-Tranzact Remitly, Moneygram, Western Union, Worldremit, Western Union, Swift Payment Limited, Paypal Inc, Homesend, Ria Financial and WiPay Global.

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Under the regulatory regime for international Money transfer operators in Nigeria, Deposit Money Banks such as First Bank Nigeria, Polaris Bank are prohibited from operating as IMTOs. the DMBs can however serve as agents to the operators.

The international remittance markets have grown significantly in Nigeria, with major contributions to investments and commerce. Nigeria’s diaspora annual remittance in the range of $21 billion is considered the largest in Africa and projected to hit $41 billion in 2016.

Prior to the Librealization of the IMTO market in 2002, the international money transfer market in Nigeria before 2008 was largely controlled by Western Union and MoneyGram. This entities took advanatage of exclusivity agreements which gave them an almost monopolistic hold over the market.

In 2007 the World Bank published the General Principles for International Remittance Services, whereby the use of exclusivity as a condition for offering remittance services was discouraged.

In 2008 the Central Bank of Nigeria (CBN), through its Directive BSD/DIR/CIR/GEN/VOL 2/017prohibited all banks from signing exclusivity clauses with international money transfer operators (IMTOs) and ordered a review of all existing agreements to expunge such clauses on the basis that it restrains competition and increases the cost of money transfer services to end users.

Paystack another prospering fin-tech company is yet to get an IMTO License and may do so very soon. Fin-tech lawyer Adavize Alao believes that further liberalization of the IMTO market would lead to people doing away with transactions that require them to be present physically before transactions can be completed and engaging in online transactions to transfer money outside Nigeria.

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