The Central Bank of Nigeria (CBN) has issued a 30-day deadline for Payment Service Providers (PSPs) to align with new regulations aimed at improving the tracking of Point of Sale (PoS) transactions. This directive, announced on September 11, 2024, is designed to enhance the security of electronic payments in Nigeria by ensuring all PoS transactions are routed through certified Payment Terminal Service Aggregators (PTSAs).
Under the new rules, PTSAs will be responsible for registering PoS terminals and ensuring compliance with CBN guidelines. This initiative is expected to significantly reduce PoS fraud and enhance the overall safety of Nigeria’s payment systems.
Historically, the Nigeria Interbank Settlement System (NIBSS) Plc, which was licensed as the country’s first PTSA in 2011, managed all PoS transactions. However, in April 2024, the CBN introduced Unified Payment Services Limited as a second PTSA to foster competition and improve service delivery.
To further strengthen the ecosystem, NIBSS recently partnered with Zone, a blockchain payment infrastructure provider, adding Payment Terminal Service Aggregator (PTSA) functions to Zone’s blockchain.
According to a circular signed by Oladimeji Yisa Taiwo from the CBN’s Payments System Management Department, the new directive mandates that all PoS transactions, whether physical or digital, must pass through one of the approved PTSAs. These certified processors are required to securely capture and monitor transaction data, with monthly reports submitted to the CBN to ensure transparency.
This initiative is part of a broader effort to combat fraud in the PoS space, which has been on the rise. A recent report from NIBSS indicated that PoS terminals were responsible for 26.37% of fraud cases in 2023.
Additionally, the Nigerian government has directed all PoS operators to register with the Corporate Affairs Commission (CAC). Following the expiry of a 60-day deadline on September 5, 2024, the CAC has warned fintechs and PoS operators to shut down any unregistered PoS businesses.
PSPs have been given 30 days to comply with these new regulations or risk penalties for non-compliance.
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