The Central Bank of Nigeria (CBN) has issued a directive requiring all Payment Service Providers to route transactions from Point of Sale (PoS) terminals, whether physical or electronic, through a CBN-approved Payment Terminal Service Aggregator (PTSA). This is part of efforts to enhance the monitoring of electronic transactions in the country and decentralize transaction routing.
In a circular signed by Oladimeji Yisa Taiwo of the CBN’s Payments System Management Department, the bank outlined the 30-day deadline for compliance. The new guidelines will impact transactions conducted at both merchant and agent locations, with the aim of addressing concerns over the centralization of PoS transactions under a single entity.
The circular states:
“To achieve the objective of tracking electronic transactions in Nigeria, the Central Bank of Nigeria, in August 2011, granted a Payment Terminal Service Aggregator licence to Nigeria Interbank Settlement System Plc. In furtherance of the above, the CBN hereby directs acquirers to route all transactions from PoS terminals at merchant and agent locations, whether on physical or electronic PoS terminals, through any CBN-licensed Payment Terminal Service Aggregator.”
The CBN added that licensed PTSAs must ensure that PoS transactions are processed through processors certified by relevant Payment Schemes, chosen by the acquirer, and licensed by the CBN.
This move follows increased efforts by the CBN to curtail fraudulent activities associated with PoS terminals, which accounted for 26.37% of fraud incidents in 2023, according to the Nigeria Inter-Bank Settlement System Plc. The CBN is also working to prevent the trading of cryptocurrency and virtual currencies via PoS systems.
In tandem with this directive, the CBN has been enforcing stricter registration requirements for PoS agents, demanding that they register their businesses with the Corporate Affairs Commission (CAC). Despite challenges in court, the CAC has begun shutting down PoS businesses that have not complied with the registration mandate following the expiration of the September 5 deadline.
This enhanced regulation of PoS transactions aims to reduce fraud, increase transparency, and bolster the integrity of Nigeria’s growing electronic payment ecosystem.
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