The Central Bank of Nigeria has ordered all Payment Service Providers to route all transactions from PoS terminals at merchant and agent locations, whether physical or electronic, through an approved CBN Payment Terminal Service Aggregator.
It also gave service providers a 30-day deadline to comply with increased routing requirements for Point of Sale transactions. This measure attempts to improve supervision of electronic transactions in Nigeria and decentralize PoS transaction routing, answering concerns about the centralisation of such activities under one body.
On Thursday, the apex bank issued a circular signed by Oladimeji Yisa Taiwo on behalf of the CBN’s Payments System Management Department stating that all PoS transactions from merchant and agent locations must henceforth go via any CBN-licensed PTSA.
The circular read, “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.”
“PTSAs are required to send PoS transactions to only processors certified by the relevant Payment Scheme, nominated by the Acquirer, and licensed by the CBN.”
This development comes after the deadline for PoS agents to legally register their enterprises with the Corporate Affairs Commission passed on September 5th.
Although the mandate was challenged in court, the CAC recently revealed that it has begun taking extreme measures, including shutting down PoS businesses that did not register.
The restriction on PoS company registration comes amid regular fraud instances involving PoS terminals and the Central Bank of Nigeria’s efforts to prohibit cryptocurrency or virtual currency trading.
According to research by Nigeria Inter-Bank Settlement System Plc, PoS terminals were responsible for 26.37% of fraud cases in 2023.
