The Central Bank of Nigeria (CBN) has directed payment service providers to start tracking Point of Sale (PoS) transactions as part of efforts to enhance transparency and curb financial misconduct in the payment system.
All Payment Service Providers are directed by the Central Bank of Nigeria to channel all transactions made from PoS terminals at merchant and agent locations, both physical or electronic, through a CBN-approved Payment Terminal Service Aggregator.
In order to strengthen electronic transaction monitoring throughout Nigeria and address concerns about centralized control of Point of Sale transactions, a 30-day deadline was issued mandating service providers comply with updated routing guidelines. This will help decentralize PoS transaction routing.
On Thursday, a circular was issued by Oladimeji Yisa Taiwo on behalf of the CBN’s Payments System Management Department indicating that all point-of-sale (PoS) transactions conducted at merchant and agent locations must be channeled through any PTSA authorized by the CBN.
In order to monitor electronic transactions in Nigeria, the Central Bank of Nigeria issued a Payment Terminal Service Aggregator license to Nigerian Interbank Settlement System Plc. Consequently, all PoS terminal transactions at merchant and agent locations must now be channeled through any CBN-authorized Payment Terminal Service provider for compliance with this directive. This was outlined by the circular stating,“To achieve the objective of tracking electronic transactions in Nigeria…through any CBN-licensed Payment Terminal Service Aggregator.”
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The CBN mandates that only processors certified by the relevant Payment Scheme, nominated by the Acquirer, and licensed are authorized to receive PoS transactions from PTSAs.
The emergence of this situation resulted from the passing of the deadline on September 5th for PoS agents to complete their official registration with the Corporate Affairs Commission.
Despite facing legal challenges, the CAC has initiated severe measures to enforce its directive by closing PoS ventures that neglected registration – a recent announcement made by the regulatory body.
The instruction to register PoS businesses is imposed in response to rampant fraudulent activity associated with PoS terminals, as well as the Central Bank of Nigeria’s efforts to prohibit cryptocurrency or virtual currency trading.
In 2023, PoS terminals were responsible for 26.37% of fraud incidents as reported by Nigeria Inter-Bank Settlement System Plc.
Additional information coming shortly…
