The Nigerian Electricity Regulatory Commission has placed strict limits on the commissions that third-party electricity bill collectors can charge and directed all electricity distribution companies to re-register every collection partner before December 31, 2025 or face sanctions. The new rules, contained in NERC’s Guidelines for the Engagement of Third-Party Collection Service Providers in NESI, take effect on November 1, 2025 and directly confront the opaque revenue practices that have weakened Nigeria’s power sector for years.
NERC’s Vice Chairman, Musiliu Oseni, signed the document, which standardises how Nigerians can pay for electricity across all channels—USSD, banking apps, PoS agents, kiosks, and rural vendors. It also sets clear limits on what these agents may charge. The guidelines reinforce Nigeria’s long-standing policy of cashless electricity payments. In 2019, the commission issued Order NERC/183/2019 directing DisCos to migrate industrial and commercial customers to cashless platforms by January 31, 2020 and residential MD customers by March 31, 2020, to reduce leakages and improve transparency.
Despite that directive, many customers continued to rely on cash payments, especially in rural areas and through agency banking. Thousands of unregistered agents charged arbitrary fees far above approved rates, worsening revenue losses and liquidity problems in the power sector.
Under the new framework, only entities licensed by the Central Bank of Nigeria—including banks, PSSPs, PTSPs, MMOs, switching companies, card schemes, and super-agents—can operate as Collection Service Providers. NERC has now set firm maximum commissions across all payment channels. The guidelines emphasise that cashless methods such as mobile apps, digital wallets, USSD, credit and debit cards, QR payments, and payment links remain the preferred options for electricity settlements.
To register, each CSP must provide a valid CBN licence, a signed agreement with the relevant DisCo, CAC documents, a banker’s reference, three years’ tax clearance, VAT registration, a full list of sub-agents, an API integration agreement with NIBSS, and proof of payment of a non-refundable ₦100,000 registration fee. No CSP can operate without NERC’s approval, and no DisCo can engage any partner that NERC has not fully cleared.
The guidelines classify collection channels into USSD transactions, banking and switching platforms like Interswitch, Flutterwave, Paystack and NIBSS, mobile payment services including wallets and transfers, agency services such as PoS and kiosks, and rural agents who serve underserved communities.
According to the rules, collection partners may not charge above ₦20 for USSD transactions below ₦5,000 and ₦50 for transactions of ₦5,000 and above. Fees for wallets, PoS, kiosks, and rural agents must fall between 0.75% and 3.25%, with hard caps ranging from ₦2,000 to ₦5,000 per transaction. NERC also imposed a non-refundable ₦100,000 registration fee on all CSPs and insisted that only companies with valid CBN licences can operate. Any contract that is not re-registered by December 31, 2025 automatically becomes invalid.
NERC stated that the new caps apply across all categories: USSD fees must remain at ₦20 or ₦50 depending on transaction value; banking and switching channels must charge 0.75% capped at ₦2,000; ATMs may charge 1.10% capped at ₦2,000; mobile wallets 1.25% capped at ₦2,000; web, chat, IVR and NQR channels 1.50% capped at ₦2,000; PoS and rural channels 1.50% capped at ₦2,000; kiosks 2.00% capped at ₦2,000; agents 2–3% capped at ₦5,000; and rural agents 3.25% capped at ₦5,000.
NERC also stated that CSPs may earn commission only for collection services. The rules prohibit deducting fees for unrelated services such as IT support or marketing. Banks and switching companies must settle on a T+1 basis, while all other collection contracts must receive prefunding. Maximum Demand customers must pay directly into DisCo accounts without third-party involvement or commission payments.
Some agents fear the 3.25% cap and ₦5,000 limit could push smaller operators out of business, especially in remote areas with low customer density and inconsistent power supply. Meanwhile, DisCos now face intense pressure to revalidate thousands of contracts with fintech partners, PoS agents, and rural cash handlers before the deadline or face penalties under NERC’s compliance framework.
NERC warned that any CSP that fails to register by December 31, 2025 “shall cease to operate.” If the policy is implemented fully, it could reduce losses, improve cash flow for DisCos, and help close the long-standing revenue gap in the electricity market.
