The Nigerian Electricity Regulatory Commission (NERC) has introduced new guidelines that overhaul how electricity bills are collected nationwide. Effective November 1, 2025, the rules impose strict caps on commissions charged by third-party agents and require all electricity distribution companies (DisCos) to re-register their collection partners by December 31, 2025 or face sanctions.
This move is aimed at curbing opaque revenue practices, eliminating leakages, and enforcing Nigeria’s long-standing policy of cashless electricity payments.
Why the Change?
- Persistent cash transactions: Despite earlier directives in 2019 mandating cashless payments, many Nigerians, especially in rural areas, still rely on cash agents.
- Unregulated charges: Thousands of unregistered vendors have been charging arbitrary rates, often far above formal limits, draining revenue from DisCos and worsening liquidity in the power sector.
- Transparency push: NERC wants all collections to flow directly into utility accounts through regulated, traceable channels.
Who Can Collect Payments?
Under the new framework, only entities licensed by the Central Bank of Nigeria (CBN) can operate as Collection Service Providers (CSPs). Eligible operators include:
- Banks
- Payment Service Providers (PSSPs)
- Payment Terminal Service Providers (PTSPs)
- Mobile Money Operators (MMOs)
- Switching companies (e.g., Interswitch, NIBSS)
- Card schemes and super-agents
Each CSP must undergo a rigorous registration process, including submission of incorporation documents, tax clearance, VAT registration, API integration agreements, and payment of a non-refundable ₦100,000 registration fee.
How Much Can Agents Charge?
NERC has set binding maximum commissions across all payment channels:
| Channel | Commission | Cap |
|---|---|---|
| USSD (below ₦5,000) | ₦20 flat | – |
| USSD (₦5,000 & above) | ₦50 flat | – |
| Banking & Switching (apps, gateways) | 0.75% | ₦2,000 |
| ATM transactions | 1.10% | ₦2,000 |
| Wallets | 1.25% | ₦2,000 |
| Mobile services (web, IVR, NQR) | 1.50% | ₦2,000 |
| PoS & agency services | 1.50–3.0% | ₦2,000–₦5,000 |
| Rural agents | 3.25% | ₦5,000 |
Agents may only earn commissions for collection services. Charging extra for IT support, marketing, or other services is prohibited.
What It Means for Consumers
- Lower costs: Customers will no longer face arbitrary or inflated charges when paying electricity bills.
- More transparency: Payments will be routed through regulated, cashless channels, reducing fraud and leakages.
- Standardised access: Nigerians can pay via USSD, banking apps, PoS agents, kiosks, or rural vendors, all under uniform rules.
What It Means for DisCos
- Compliance pressure: DisCos must re-register thousands of collection partners before December 31, 2025. Any unregistered contract becomes invalid.
- Liquidity boost: With capped commissions and cashless enforcement, more revenue should flow directly into DisCos’ accounts, helping close the sector’s long-running revenue gap.
- Operational risk: Smaller rural agents may struggle under the new caps, potentially reducing coverage in remote areas.
The Bigger Picture
NERC’s directive is part of a broader effort to modernise Nigeria’s electricity sector. By enforcing cashless payments and regulating commissions, the Commission hopes to:
- Improve financial transparency
- Strengthen DisCos’ liquidity
- Reduce consumer exploitation
- Align Nigeria’s power sector with global best practices
However, implementation will be critical. With just weeks to comply, DisCos and agents face a race against time to revalidate contracts and integrate systems before the deadline.