Abuja, Nigeria – The Central Bank of Nigeria (CBN) has issued a directive mandating that all Point of Sale (PoS) transactions must be routed through licensed Payment Terminal Service Aggregators (PTSAs), in a move aimed at improving the tracking and management of electronic transactions across the country.
In a circular posted on its website on Thursday, the apex bank highlighted that this initiative is part of ongoing efforts to strengthen the integrity of Nigeria’s payment systems. The directive comes after concerns were raised about the concentration of PoS transactions under a single aggregator.
“To mitigate the concerns regarding channelling all Point of Sale transactions through a single aggregator, the CBN on April 19, 2024, granted a second PTSA licence to Unified Payment Services Limited,” the circular noted. This decision followed the initial issuance of a PTSA licence to Nigeria Interbank Settlement System Plc in 2011.
New Rules for Acquirers and Payment Processors
Under the new regulations, acquirers—banks or financial institutions responsible for processing payments—are required to route all PoS transactions, whether conducted on physical or electronic terminals, through one of the two licensed PTSAs. The directive emphasizes that licensed processors must work in partnership with these PTSAs, allowing acquirers the flexibility to choose between available service providers.
Payment Terminal Service Providers (PTSPs), which are responsible for deploying and managing PoS terminals, are also required to configure their devices and applications to work seamlessly with any PTSA selected by acquirers. PTSPs are expected to submit monthly reports to the CBN, detailing the number of merchants and agents they manage, as well as which PTSA services were used.
Reporting and Compliance
Both PTSAs are mandated to provide monthly reports on all transactions processed through their platforms. These reports must be submitted to the CBN’s Payments System Management Department within seven days of the end of each month.
The CBN has given Payment Service Providers (PSPs) a 30-day window to comply with these new regulations, warning that non-compliance will attract appropriate sanctions.
Recent Moves Towards PoS Regulation
The CBN’s directive follows an earlier announcement by the Corporate Affairs Commission (CAC) on July 7, requiring all PoS operators in Nigeria to register with the Commission by September 5. This effort is part of a broader drive to regulate the booming PoS business sector, which has witnessed significant growth in recent years as Nigerians increasingly adopt electronic payment systems.
Industry stakeholders have expressed mixed reactions to the CBN’s move, with some lauding it as a necessary step toward ensuring transparency in the financial sector, while others have raised concerns over potential disruptions during the transition to the new system.
This latest directive reaffirms the CBN’s commitment to maintaining a secure and efficient electronic payment ecosystem in Nigeria, as the country continues to embrace digital financial solutions.