The Central Bank of Nigeria (CBN) has directed all Payment Service Providers to route all transactions from Point of Sale (PoS) terminals through an approved CBN Payment Terminal Service Aggregator.
Daily Report Nigeria reports that the directive, issued on Thursday, gives service providers a 30-day deadline to comply with enhanced routing guidelines for PoS transactions.
According to the CBN, this move aims to decentralize PoS transaction routing, addressing concerns about the centralization of such transactions under a single entity.
A circular signed by Oladimeji Yisa Taiwo on behalf of the CBN’s Payments System Management Department revealed that all PoS transactions from merchant and agent locations must now be routed through any CBN-licensed Payment Terminal Service Aggregator (PTSA).
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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.
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“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.”
This development follows the expiration of the September 5th deadline for PoS agents to formally register their businesses with the Corporate Affairs Commission (CAC).
Despite a court challenge, the CAC has commenced taking drastic actions, including shutting down PoS businesses that failed to register.
The directive on PoS business registration comes amid frequent fraud incidents involving PoS terminals and the CBN’s plans to prevent trading in cryptocurrency or virtual currency.
A report by the Nigeria Inter-Bank Settlement System Plc disclosed that PoS terminals accounted for 26.37 per cent of fraud incidents in 2023.
