CBN Orders Payment Providers to Implement New PoS Transaction Tracking Rules

The Central Bank of Nigeria (CBN) has mandated that all transactions from PoS terminals—whether physical or electronic—be routed through approved Payment Terminal Service Aggregators (PTSAs). The directive, effective immediately, gives Payment Service Providers 30 days to comply with these new guidelines.

The CBN’s latest circular, issued on Thursday, September 12, and signed by Oladimeji Yisa Taiwo from the Payments System Management Department, outlines a strategic shift aimed at improving the monitoring and security of electronic transactions across the country. This new policy is set to address previous concerns about the centralization of PoS transaction data under a single entity, and to strengthen regulatory oversight.

Under the new regulations, all PoS transactions from merchant and agent locations must be processed through CBN-licensed PTSAs. The circular specifies that PTSAs must route transactions only to processors certified by the relevant Payment Scheme, nominated by the Acquirer, and licensed by the CBN.

The move follows the recent expiration of the September 5 deadline for PoS agents to officially register their businesses with the Corporate Affairs Commission (CAC). Despite some legal challenges to the registration directive, the CAC has begun enforcing compliance by shutting down unregistered PoS businesses.

This regulatory overhaul comes in response to increasing incidents of fraud linked to PoS terminals, which, according to a report by Nigeria Inter-Bank Settlement System Plc, accounted for 26.37% of all fraud cases in 2023. The CBN is also working to curb the use of cryptocurrencies and virtual currencies in transactions, aiming to tighten financial security.