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The short answer
A remittance to Nigeria usually starts with a licensed money transfer operator or bank abroad, moves through correspondent bank accounts in foreign currency, and is paid out by a Nigerian bank either in naira at the market rate or, where allowed, in foreign currency into a domiciliary account. International money transfer operators must be licensed by the CBN to pay out in Nigeria, and each step adds a cost or a delay.
The chain in one view
| Step | Who is involved | What happens |
|---|---|---|
| 1. Collection | Money transfer operator (MTO), app or bank in the sender's country | Sender pays in pounds, dollars, euros or another currency; the provider checks identity under its home rules |
| 2. Pricing | The provider | Quotes an exchange rate and a fee; the gap between that rate and the market rate is part of the cost |
| 3. Cross-border movement | Correspondent banks | Foreign currency moves between the provider's account and the account of its Nigerian partner bank, often through a nostro/vostro arrangement |
| 4. Conversion | Nigerian partner bank, on the Nigerian Foreign Exchange Market (NFEM) | Where the recipient takes naira, foreign currency is sold for naira at the prevailing market rate |
| 5. Payout | Nigerian bank, mobile money operator or agent | Credit to a bank account (often via NIP), cash pickup, or credit to a domiciliary account |
Who is allowed to pay out in Nigeria
Foreign money transfer companies cannot simply pay Nigerians directly. To operate in Nigeria they need a CBN licence as an International Money Transfer Operator (IMTO), and they must work with Nigerian banks as payout and settlement partners. The CBN publishes the list of licensed IMTOs and revised its IMTO guidelines in 2024, including allowing rates to reflect the prevailing market. The detailed payout rules are covered in our page on CBN rules on remittances.
Banks abroad can also send directly by SWIFT wire to a Nigerian bank account. In that case there is no IMTO: the sending bank uses its correspondent network to reach the Nigerian bank, and intermediary banks may deduct charges along the way.
How the money actually crosses the border
Money does not physically travel. A remittance is a set of ledger entries. The provider holds pre-funded balances, or settles in batches, with its Nigerian partner bank's foreign currency account at a correspondent bank, typically in London, New York or Frankfurt depending on the currency. When the provider instructs a payout, the partner bank credits the recipient from its own funds and is reimbursed when the provider's batch settles.
- The provider sends the payment instruction and recipient details to the Nigerian partner bank.
- The bank screens the payment (sanctions, anti-money-laundering checks) and checks the recipient's name and account number.
- For a naira payout, the bank converts at its rate and credits the account, often using NIP if the recipient banks elsewhere. See how NIBSS works.
- For a foreign currency payout, the bank credits a domiciliary account or pays cash in the currency where its rules allow.
Cash pickup, wallets and agents
Not every recipient has a bank account. Some IMTOs offer cash collection at partner bank branches or agents, and some pay into mobile wallets run by licensed mobile money operators or payment service banks. The recipient usually has to show identification and quote a reference number. The money still settles through a licensed Nigerian bank; the agent or wallet is the last step.
Where the cost comes from
The World Bank measures remittance costs as the total cost of sending a set amount, including the fee and the exchange rate margin. For a sender, the margin is often bigger than the visible fee.
Worked example (example figures)
A sender in the UK sends £200. The provider charges a £2 fee and offers ₦1,950 per pound when the market rate is ₦2,000. The recipient gets £200 × ₦1,950 = ₦390,000. At the market rate the £200 would have been worth ₦400,000. The exchange margin is ₦10,000, worth £5, so the total cost is £7, or 3.5% of the amount sent. A provider showing a higher fee but a rate closer to market can be cheaper overall.
- Fee: fixed or percentage, charged by the sending provider.
- FX margin: the gap between the rate you get and the market rate.
- Intermediary charges: on SWIFT wires, correspondent banks may deduct fees before the money arrives.
- Receiving charges: some banks charge to receive or convert inward transfers; check your bank's tariff.
Why remittances sometimes take longer
- Name or account mismatches trigger manual checks.
- Payments flagged by sanctions or anti-money-laundering screening are held for review.
- Correspondent bank cut-off times, weekends and public holidays in either country delay SWIFT wires.
- Batch settlement between the provider and the partner bank can delay payouts outside banking hours.
How the official naira rate is formed is explained in how the NFEM rate is set. Senders should also read about money transfer scams targeting the diaspora.
Where Pryme fits
A Pryme account can be opened from any country and holds NGN, USD, GBP and EUR with local account details for each. Money stays in the currency it arrived in until you choose to convert with Swap, which shows the rate first and the fee on its own line before you approve. See multicurrency accounts.
Questions people ask
How do I receive money from abroad in Nigeria?
The sender uses a CBN-licensed IMTO, an app with a licensed partner, or a bank wire. You receive it into your bank account in naira or, where allowed, into a domiciliary account, or collect cash at an agent.
Can I receive dollars in Nigeria from abroad?
Yes, inward remittances can be paid into a domiciliary account in foreign currency where the provider and your bank support it. Check with your bank before the sender pays.
Why did I get less naira than expected?
The provider's exchange rate may be below the market rate, and fees or intermediary charges may have been deducted. Compare the total cost, not just the fee.
What is an IMTO?
An International Money Transfer Operator is a company licensed by the CBN to pay out cross-border remittances in Nigeria through partner banks.
Sources
- Central Bank of Nigeria (CBN) · accessed Oct 2026
- CBN list of licensed International Money Transfer Operators · accessed Oct 2026
- World Bank: Migration and remittances data · accessed Oct 2026
- World Bank: Remittance Prices Worldwide · accessed Oct 2026
- Nigeria Inter-Bank Settlement System (NIBSS) · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.