What are the settlement accounting entries on NXPay

DEFINITION OF TERMS

1. Where Bank A is the sending bank, and Bank B is the beneficiary bank
2. Dr means Debit
3. Cr means Credit
4. NIBSS – Nigeria Interbank Settlement System – responsible for interbank settlement of transactions.
5. Billing – The process of debiting the transaction fees accumulated for a period.

Token Generation (Token Expires after 72 hours)

INTRABANK (Happens within the bank)

After balance Enquiry

DR: Payers Account (Amount & fee) in Bank A

CR: Payable Account (Amount & fee) in Bank A (or split the amount & fee and credit fee into a fee account)

Upon token redemption

DR: Receivable Account (Amount Only) in Bank A

CR: Pay Beneficiary (Amount Only)

Transaction Settlement Process: (This process will be done within the bank)

DR: Payable Account (Amount Only) in Bank A

CR: Receivable Account (Amount Only) in Bank A

Fee (Billing) Settlement Process: (To be passed by NIBSS on weekly basis subject to change)

DR: Bank A (Payer’s bank) CBN Account (fee Only)

CR: The counterparties/stakeholders for their own share of the fee.

NOTE: Receivable Account and Payable Account can also be a single transit account. This solely depends on the bank’s decision.

Token Generation  (Token Expires after 72 hours)

INTERBANK (Happens between two banks)

After balance Enquiry

DR: Payers Account (Amount & fee) in Bank A

CR: Payable Account (Amount & fee) in Bank A (or split the amount & fee and credit fee into a fee account).

Upon token redemption

DR: Receivable Account (Amount Only) in Bank B

CR: Pay Beneficiary (Amount Only)

Transaction Settlement Process:  (To be passed by NIBSS)

DR: Bank A CBN Account (Amount Only)

CR: Bank B CBN Account (Amount Only)

Fee (Billing) Settlement Process: (To be passed by NIBSS on weekly basis subject to change)

DR: Bank A (Payer’s bank) CBN Account (fee Only)

CR: The counterparties/stakeholders for their own share of the fee.