The Central Bank of Nigeria (CBN) has directed all Payment Service Providers to route transactions from Point of Sale (PoS) terminals at merchant and agent locations—both physical and electronic—through an approved CBN Payment Terminal Service Aggregator (PTSA).
The move is aimed at decentralising PoS transaction routing and strengthening the monitoring of electronic payments across the country.
In a circular issued on Thursday, the apex bank gave a 30-day deadline for service providers to comply with the enhanced routing guidelines.
The circular, signed by Oladimeji Yisa Taiwo on behalf of the CBN’s Payments System Management Department, outlined new measures to ensure more secure and traceable electronic transactions.
“To achieve the objective of tracking electronic transactions in Nigeria, the Central Bank of Nigeria, in August 2011, granted a Payment Terminal Service Aggregator licence to Nigeria Interbank Settlement System Plc,” the circular stated.
It added, “In furtherance of the above, the CBN hereby directs acquirers to route all transactions from PoS terminals at merchant and agent locations, whether on physical or electronic PoS terminals, through any CBN-licensed Payment Terminal Service Aggregator.”
The CBN further clarified that, “PTSAs are required to send PoS transactions to only processors certified by the relevant Payment Scheme, nominated by the Acquirer, and licensed by the CBN.”
The new guidelines come shortly after the September 5 deadline for PoS agents to register their businesses with the Corporate Affairs Commission (CAC) expired.
While some had challenged the directive in court, the CAC recently began cracking down on non-compliant PoS businesses, shutting down those that failed to register.
This push for enhanced regulation is taking place against a backdrop of rising concerns over fraud involving PoS terminals. According to a report by the Nigeria Inter-Bank Settlement System Plc (NIBSS), PoS terminals were responsible for 26.37% of fraud incidents in 2023.
Additionally, the CBN is seeking to address vulnerabilities in the system as it continues to clamp down on cryptocurrency trading and other virtual currencies.
By implementing these new measures, the CBN hopes to further secure the digital payments ecosystem in Nigeria while ensuring better oversight of financial transactions.