The news:
- The Central Bank of Nigeria (CBN) has issued a 30-day deadline to Payment Service Providers (PSPs) to comply with new rules on tracking Point of Sale (PoS) transactions.
- This new directive, announced on September 11, 2024, is designed to improve the monitoring of electronic payments in Nigeria by ensuring that all PoS transactions are routed through certified Payment Terminal Service Aggregators (PTSAs).
- These PTSAs will be responsible for making sure that PoS machines are properly registered and meet CBN guidelines.
The ultimate goal is to reduce PoS fraud and improve the overall security of Nigeria’s payment system.
Previously, PoS transactions were managed by one main aggregator, the Nigeria Interbank Settlement System (NIBSS) Plc, which received its PTSA licence in 2011.
However, to promote competition and increase service quality, the CBN licenced a second PTSA, Unified Payment Services Limited, in April 2024.
Recall that the NIBSS recently partnered with Zone to add Payment Terminal Service Aggregator (PTSA) functions to Zone’s blockchain, making the blockchain payment infrastructure provider also a PTSA.
These PTSAs will now work together to provide better oversight and security in the growing electronic payment space, promoting transparency and operational efficiency in Nigeria’s growing electronic payments space.
As part of the directive contained in the circular, signed by Oladimeji Yisa Taiwo on behalf of the CBN’s Payments System Management Department, the apex bank wants all transactions from PoS devices, whether physical or digital, to pass through one of these licensed PTSAs.
This process ensures that transaction data is securely captured and monitored by certified processors, which are also subject to CBN’s approval.
Additionally, PSPs and PTSAs are required to submit monthly reports on their operations to the CBN, ensuring transparency and compliance with the new guidelines.
This move aligns with broader efforts to tackle issues like fraud, which has been a growing problem in the PoS space. For instance, a report by the NIBSS revealed that PoS terminals were responsible for 26.37% of fraud cases in 2023.
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To cut down on fraud and make things more transparent, the Nigerian government directed all point-of-sale (PoS) operators to register with the Corporate Affairs Commission (CAC).
Recently, the CAC warned fintechs and PoS operators to shut down unregistered PoS businesses, as the 60-day deadline from July 7, 2024, elapsed on September 5, 2024.
PSPs are to comply with these changes within the 30-day window or risk facing penalties.
