The Central Bank of Nigeria (CBN) has issued a directive requiring all Payment Service Providers to route Point of Sale (PoS) transactions through licensed Payment Terminal Service Aggregators (PTSAs).
This move, part of the CBN’s broader strategy to decentralize PoS transaction management, is aimed at improving the monitoring of electronic payments and addressing concerns about the centralization of PoS transactions under a single entity.
The directive, which includes a 30-day compliance deadline, mandates that all PoS transactions, whether physical or electronic, be routed through any CBN-licensed PTSA. The CBN circular, signed by Oladimeji Yisa Taiwo from the Payments System Management Department, also emphasized that PTSAs must send these transactions to processors certified by the relevant payment schemes and licensed by the CBN.
This step follows the expiration of an earlier 5th September deadline for PoS agents to register their businesses with the Corporate Affairs Commission (CAC). Despite legal challenges, the CAC has taken action, including shutting down non-compliant PoS businesses.
The increased focus on regulating PoS operations is a response to rising fraud incidents involving PoS terminals.
According to the Nigeria Inter-Bank Settlement System Plc, PoS terminals were responsible for 26.37% of fraud incidents in 2023. This regulation aims to improve transaction security and safeguard consumers from such risks.