Central Bank Official: National Payment Switch Differs from Licensed Private Switches

Central Bank Committed to Involving the Private Sector in Developing Payment Systems and Expanding Electronic Payment Services

The Central Bank of Sudan’s decision to revoke the license granted to Al-Asjad Smart Solutions, first reported exclusively by Sudanhorizon, and the intense debate that followed on social media, have drawn attention to several aspects of the issue and raised numerous questions—both objective and otherwise—regarding the nature of the Central Bank’s action and the regulatory framework governing licenses for payment switch operators.
To address these questions, the editorial team at Sudanhorizon interviewed Zahir Mohamed Osman Faqiri, Director of the Payment Systems Department at the Central Bank of Sudan.

What is a payment switch, and why does the Central Bank license operators?

A payment switch is a technological platform that connects a bank to point-of-sale (POS) terminals, automated teller machines (ATMs), card issuance services, and other retail payment services. A private payment switch also enables banks to connect with external service providers.
The Central Bank licenses payment switch operators to expand electronic payment services, encourage private-sector investment in the payments industry, and promote financial inclusion. Licensed private switches also provide services to banks that do not operate their own switching systems, if those banks choose to use them. In addition, they create a competitive environment that can reduce service costs while providing multiple transaction channels and minimizing reliance on a single point of failure.

What is the difference between the National Payment Switch and licensed private switches?

The National Payment Switch is the country’s central payment infrastructure. It is owned by the Central Bank and is operated either directly by the Bank or by the Electronic Banking Services Company (EBS), one of the Central Bank’s affiliated institutions.
This national switch processes settlement instructions received from private payment switches, facilitating interbank settlement, recording financial transactions between banks, reconciling balances, and serving as the unified national settlement platform. It represents the backbone of Sudan’s payment system and its final settlement authority.
Licensed private payment switches, by contrast, are operational technology platforms managed by commercial banks or licensed companies after obtaining Central Bank approval and meeting the published licensing requirements, which include technical, technological, governance, and financial standards.
Private switches provide additional connectivity services to banks that do not operate their own switches, enabling wider deployment of POS terminals, payment cards, and related services.
They operate under the supervision and oversight of the Central Bank in accordance with its regulations and standards. They neither replace nor compete with the National Payment Switch in its sovereign role but instead complement it by expanding and diversifying electronic payment services.

Was Al-Asjad the first company to receive this type of license?

No. Similar licenses for private payment switch operations had previously been granted to two other companies in 2024 and 2025. The licensing process is open to any company that satisfies the announced technical, financial, and regulatory requirements. It is not an exceptional arrangement for any specific company.

Why wasn’t the operation of the private payment switch awarded through a public tender?

Because payment switch operations are governed by a licensing system, not by government procurement procedures.
Public tenders are used when the government purchases goods or services using public funds. A license, however, is a regulatory authorization available to any qualified company that applies and successfully meets the published evaluation criteria. This is the standard approach used in regulating payment systems and was the same process followed for previously licensed companies.

Regarding Al-Asjad, did the Central Bank cancel a contract or revoke a license?

What occurred was the revocation of a regulatory license, not the termination of a commercial agreement.
Licenses granted to payment service providers are conditional operating authorizations that require continuous compliance with applicable regulations and standards. They remain subject to ongoing review throughout their validity. If any licensing condition is no longer met, revocation is a normal regulatory measure rather than a contradiction or reversal of policy.
Why would a license be granted and then revoked shortly afterward? Doesn’t that indicate weaknesses in the initial review?
Regulatory oversight is an ongoing process that does not end when a license is issued.
The Central Bank continuously monitors licensed entities throughout the life of the license. If new information emerges or compliance requirements are no longer met, the Bank takes appropriate regulatory action, including revocation where necessary.
Revoking a license following subsequent review demonstrates that supervision is active and effective—not that the original assessment was inadequate. The proper standard is not that a license should never be revoked, but that it should be revoked whenever circumstances warrant such action.

What specifically led to the revocation of Al-Asjad’s license?

The decision was based on the recommendation of a specialized technical and legal committee following a comprehensive review conducted in accordance with the Bank’s published technical, financial, and regulatory standards.
As is common practice among central banks and regulatory authorities worldwide, the Central Bank does not disclose confidential supervisory details concerning entities under its oversight, in order to safeguard the integrity of the banking system and the confidentiality of regulatory procedures.
The Bank emphasized that the decision was based on documented institutional grounds rather than individual considerations.

Was the decision influenced by media coverage or social media campaigns?

No.
The decision followed the recommendation of the competent committee through an established institutional process based on technical and legal criteria, not in response to public pressure.
The Bank also noted that it had issued an explanatory statement outlining the regulatory framework before the decision was announced, demonstrating that the matter was being handled according to established procedures rather than as a reaction to public debate.
At the same time, the Bank expressed appreciation for citizens’ engagement with public affairs, describing responsible public interest as an important form of community oversight that supports reform efforts and the protection of public resources.

Were customers’ funds or personal data affected?

No.
The company never commenced operations or connected to the national banking system.
The Central Bank requires prior written approval before any licensed company may establish system connectivity or exchange customer data, and such approval was never granted.
Accordingly, the license was revoked before the company handled any customer funds or personal information.
The Bank also emphasized that all participants in Sudan’s payment sector are required to comply with internationally recognized information security and data protection standards.

What happens to the rights of anyone who dealt with the company?

The Central Bank stated that it has taken the necessary measures to safeguard the rights of all concerned parties.
Although the company had not processed any transactions, the Bank affirmed that it would take any required action to protect legitimate interests, stressing that safeguarding customers’ rights and funds remains a non-negotiable priority in all supervisory decisions.

How will similar situations be prevented in the future?

The Central Bank said it continues to strengthen its regulatory framework for the financial technology sector.
The specialized committee remains responsible for evaluating applications from prospective companies under uniform standards applied equally to all applicants without exception or discrimination.
The Bank also reaffirmed its support for serious private-sector participation in developing payment services within a transparent regulatory framework that protects the financial system while serving the public interest.

What impact will this decision have on investment in Sudan’s fintech sector?

According to the Central Bank, the decision sends a message of regulatory discipline that should reassure serious investors by demonstrating that the same rules apply to everyone and that continued compliance is the basis for maintaining a license.
The Bank emphasized that licenses already granted to compliant companies remain valid and secure, and reiterated its commitment to maintaining a predictable investment environment in which regulatory decisions reflect stable and transparent rules rather than unexpected policy shifts.

Shortlink: https://sudanhorizon.com/?p=15659