All Payment Service Providers have been mandated by the Central Bank of Nigeria (CBN) to channel all transactions from Point of Sales (PoS) terminals, whether at physical or electronic merchant and agent locations, through a CBN-approved Payment Terminal Service Aggregator.
CBN also issued a 30-day deadline requiring service providers to comply with enhanced routing guidelines for Point of Sale transactions.
The apex bank, in a circular signed by Oladimeji Yisa Taiwo on behalf of the CBN’s Payments System Management Department on Thursday, stated that all PoS transactions from merchant and agent locations must now be routed through any CBN-licensed PTSA.
CAC’s Insistence On Registration Of POS Operators
This move aims to strengthen the monitoring of electronic transactions across Nigeria and decentralise PoS transaction routing, addressing concerns about the centralisation of such transactions under a single entity.
“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 ,” the circular read.
This development came after the expiration of the 5th September deadline for PoS agents to formally register their businesses with the Corporate Affairs Commission.
Although the directive was challenged in court, the CAC recently announced that it has commenced taking drastic actions, including shutting down PoS businesses that failed to register.
The directive on PoS business registration comes against the backdrop of frequent fraud incidents involving PoS terminals and the CBN’s plans to prevent trading in cryptocurrency or virtual currency.