Central Bank of Nigeria (CBN) has issued a new directive mandating that all Point-of-Sale (PoS) transactions at merchant and agent locations, whether physical or electronic, must be routed through a licensed Payment Terminal Service Aggregator (PTSA).
Ravenewsonline reports that the directive is part of the bank’s broader efforts to enhance the monitoring of electronic payments across the country.
In a circular released by Oladimeji Yisa Taiwo of the CBN’s Payments System Management Department, service providers have been given a 30-day deadline to comply with these enhanced routing guidelines.
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The central bank emphasized that PoS transactions must now pass through one of the CBN-approved PTSAs, which are responsible for ensuring compliance and security in electronic transactions.
The circular stated, “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 this, the CBN hereby directs acquirers to route all transactions from PoS terminals at merchant and agent locations, through any CBN-licensed PTSA.”
The new policy aims to decentralize transaction routing to prevent over-centralization of PoS operations under a single entity, addressing concerns over transparency and accountability.
Additionally, it aligns with CBN’s continued push to combat fraud and enhance security measures within Nigeria’s electronic payment system.
According to a recent report from Nigeria Inter-Bank Settlement System Plc, PoS terminals accounted for over 26% of fraud incidents in 2023.
This directive also comes just days after the September 5 deadline for PoS agents to register their businesses with the Corporate Affairs Commission (CAC).
The CAC has already begun cracking down on non-compliant operators, shutting down unregistered PoS businesses as part of its enforcement efforts.
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These measures reflect the CBN’s broader initiatives to regulate and secure Nigeria’s payment ecosystem, particularly following concerns over the use of PoS terminals for fraudulent activities and the ongoing efforts to limit trading in cryptocurrencies.
Service providers have until October 12, 2024, to ensure they are fully compliant with the new routing guidelines. Failure to comply may result in further regulatory actions from the CBN.
