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Nigerian Fintech Architecture — Six Functions CBN Will Ask About in the Sandbox Application

#nigeria #fintech #puppet #javascript

There is one architectural diagnostic that separates CBN Sandbox-ready Nigerian fintech from products that appear ready but have critical gaps.

Can you name — precisely, with regulatory status — who performs each of these six functions in your product?

The Six Functions 

const architectureDiagnostic = {
  kyc:                'Named provider + regulatory status + KYC tier satisfied',
  sanctionsScreening: 'Automated + onboarding AND ongoing + users AND counterparties',
  fxConversion:       'Named licensed entity — "Paystack" is NOT an FX licence',
  custody:            'Legally segregated — company bank account is NOT segregated custody',
  settlement:         'T+1 or T+2 — NOT the same as authorization',
  payout:             'Named executor + SLA + failed payout handling + reconciliation'
};
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The Most Common Gaps 

const commonGaps = [
  {
    gap: '"We use Paystack" as the FX answer',
    reality: 'Paystack is a CBN-licensed PSP. Not an FX licence holder.',
    fix: 'Named AFEX-licensed BDC, CBN-licensed IMTO or licensed fintech with FX permissions'
  },
  {
    gap: 'User funds in company bank account',
    reality: 'This is fund commingling — not segregated custody',
    fix: 'Trust/escrow account at licensed bank — separate from operational account'
  },
  {
    gap: 'Wallet credited on Paystack success',
    reality: 'That is authorization. Settlement is T+1 or T+2.',
    fix: 'Credit wallet only on confirmed settlement — not on charge.success webhook'
  },
  {
    gap: 'Sanctions screening at onboarding only',
    reality: 'Users must be screened on an ongoing basis',
    fix: 'Nightly screening job against UN, OFAC, NFIU, PEP lists'
  }
];
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KYC — Named Provider Required 

// Not "some verification service" — a named provider with named status
const kycSetup = {
  bvnVerification: 'NIBSS (Nigerian Inter-Bank Settlement System)',
  idVerification: 'Smile Identity / Youverify / Prembly',
  livenessDetection: '95%+ confidence required — defeats static photo attacks',
  sanctionsAndPEP: 'Included in most Nigerian KYC providers',

  // VASP track additional
  blockchainAnalytics: 'Chainalysis / Elliptic / TRM Labs — ALL incoming deposits'
};
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Settlement State Machine — Required 

// Authorization ≠ Settlement — model this explicitly
const STATES = {
  INITIATED:  'created — no money moved',
  AUTHORIZED: 'bank approved — NOT settled, NOT available',
  SETTLED:    'in Paystack balance — T+1 or T+2',
  AVAILABLE:  'credited to user wallet — ready for use'
};

// Available balance: only settled credits minus pending debits
const availableBalance = await ledger.query(`
  SELECT SUM(CASE
    WHEN entry_type = 'CREDIT' AND settlement_status = 'SETTLED' THEN amount
    WHEN entry_type = 'DEBIT' AND settlement_status IN ('PENDING','SETTLED') THEN -amount
    ELSE 0
  END) AS available
  FROM ledger_entries WHERE account_id = $userId
`);
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The Corridor Map 

// Required CBN Sandbox document
// Every entity, their regulatory status, data flows, fund flows, failure scenarios

const corridorMap = {
  entities: [
    { name: 'Your Platform', status: 'CBN Sandbox Applicant' },
    { name: 'NIBSS', status: 'CBN-regulated infrastructure' },
    { name: 'Smile Identity', status: 'Licensed KYC provider' },
    { name: 'Paystack', status: 'CBN-licensed PSP' },
    { name: 'Partner Bank', status: 'CBN-licensed commercial bank' }
  ],
  fundFlow: [
    'User → Paystack (AUTHORIZED)',
    'Paystack escrow → Paystack balance (SETTLED T+1)',
    'Paystack → Trust account at Partner Bank (AVAILABLE)',
    'Trust account → User wallet ledger (CREDITED)',
    'User wallet → Recipient via NIP (PAID OUT)'
  ],
  failureScenarios: [
    'Paystack settlement delayed — do not credit user wallet',
    'KYC provider down — queue and retry, do not onboard',
    'Sanctions match on existing user — suspend account, escalate'
  ]
};
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ZikarelHub LTD is Nigeria's #1 software and digital agency — Nigerian fintech built with the architectural clarity CBN examination requires.

Which of the six functions does your product have the least clarity on right now? 👇

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