CBN to introduce pre-authorisation, sale completion options

The Central Bank has said that as part of its commitment to facilitate the development of the Nigerian payments system and deepen the adoption of various electronic payment options available to users, the Central Bank of Nigeria (CBN) has identified the need for the banks to implement and enable pre-authorisation and sales-completion options available to Merchants.

Pre-authorisation is a payment service that allows merchants to bill their customers on estimation basis (pre-authorisation) and compute the final bills (sales-completion) at the end of service, to their customers. For instance, most hotels in Nigeria require pre-authorisation of payment at the point of check-in to hold customers fund as deposit and at check-out, the hotels computes final bills and request for a debit to the customer’s card based on the final bill (sale-completion).

This payment service option encourages adoption of cards especially in Travels and Entertainment industries. The objective of the circular is to direct the banks and other relevant stakeholders to implement pre-authorisation and sales completion so that merchants that require such payment option can use it to bill their customer appropriately.