The Central Bank of Nigeria (CBN) has mandated that all Payment Service Providers direct transactions from Point of Sale (PoS) terminals at merchant and agent locations, whether physical or digital, through a CBN-approved Payment Terminal Service Aggregator (PTSA).
Service providers have 30 days to adhere to new routing guidelines for PoS transactions.
This directive is designed to enhance the oversight of electronic transactions throughout Nigeria and to decentralize PoS transaction routing, which had previously been concentrated under a single entity.
In a circular signed by Oladimeji Yisa Taiwo from the CBN’s Payments System Management Department, the CBN specified that all PoS transactions from merchant and agent locations must now be routed through a licensed PTSA.
The circular states, “To track electronic transactions in Nigeria, the CBN granted a PTSA license to Nigeria Interbank Settlement System Plc in August 2011. Following this, the CBN directs acquirers to route all PoS transactions through any CBN-licensed PTSA.”
Additionally, PTSAs must direct PoS transactions only to processors certified by the relevant Payment Scheme, nominated by the Acquirer, and licensed by the CBN.
This directive follows the recent deadline of September 5 for PoS agents to register their businesses with the Corporate Affairs Commission (CAC). The CAC has begun taking severe measures, including shutting down unregistered PoS businesses, in response to this directive.
This move is part of the CBN’s broader strategy to tackle frequent fraud incidents associated with PoS terminals and to curb cryptocurrency and virtual currency transactions.
According to a report by Nigeria Inter-Bank Settlement System Plc, PoS terminals were involved in 26.37% of fraud incidents in 2023.
