The Central Bank of Nigeria (CBN) has directed all Payment Service Providers (PSPs) to begin tracking Point of Sale (PoS) transactions, requiring that all such transactions—whether physical or electronic—be routed through an approved Payment Terminal Service Aggregator (PTSA). The directive, issued in a circular signed by Oladimeji Yisa Taiwo on behalf of the CBN’s Payments System Management Department, aims to decentralize the monitoring of PoS transactions and strengthen electronic transaction oversight across the country.
In the circular released on Thursday, the CBN gave PSPs a 30-day deadline to comply with the new guidelines, emphasizing that all PoS transactions from merchant and agent locations must now be processed via CBN-licensed PTSAs. The move is intended to address growing concerns over the centralization of transaction routing and the rising incidences of fraud involving PoS terminals.
“To enhance the tracking of electronic transactions in Nigeria, the Central Bank granted a Payment Terminal Service Aggregator licence to Nigeria Interbank Settlement System Plc (NIBSS) back in 2011,” the circular stated. “This new directive ensures that acquirers now route all PoS transactions through any CBN-licensed PTSA, both for physical and electronic PoS terminals.”
The CBN also stipulated that PTSAs are required to forward PoS transactions only to processors certified by the relevant Payment Scheme, nominated by the acquirer, and licensed by the CBN. This measure is designed to increase transparency and ensure that transactions are handled by trusted and certified entities.
This directive follows closely after the 5th September deadline for PoS agents to register their businesses with the Corporate Affairs Commission (CAC), which resulted in the shutdown of unregistered PoS businesses. The registration requirement had sparked legal challenges, but the CAC has since begun enforcing the rules to formalize the industry and curb fraud.
According to a report by the Nigeria Inter-Bank Settlement System Plc (NIBSS), PoS terminals accounted for 26.37% of fraud incidents in 2023, raising alarm over the security vulnerabilities in the payment system. The CBN’s new guidelines are expected to mitigate these issues, preventing illicit activities such as trading in cryptocurrency or virtual currencies through PoS terminals.
