• The CBN has mandated that all PoS transactions be routed through approved Payment Terminal Service Aggregators (PTSAs) within the next 30 days to improve oversight and decentralize transaction routing
• PTSAs must forward PoS transactions only to processors certified by relevant Payment Schemes, nominated by the acquirer, and licensed by the CBN
• The new directive follows a report indicating that PoS terminals were involved in 26.37% of fraud incidents in 2023 and coincides with a deadline for PoS agents to register with the Corporate Affairs Commission, with non-compliance leading to business shutdowns

To enhance the oversight of electronic transactions and combat fraud, the Central Bank of Nigeria (CBN) has mandated a significant overhaul in the processing of point-of-sale (PoS) transactions. 

In a directive issued on Thursday, September 12, the CBN has instructed all Payment Service Providers (PSPs) to route PoS transactions through approved CBN Payment Terminal Service Aggregators (PTSAs) within the next 30 days.

The new directive requires that all PoS transactions, whether conducted via physical or electronic terminals at merchant and agent locations, be processed through a CBN-licensed PTSA. 

This move is aimed at decentralising the routing of transactions, which had previously been concentrated under a single entity. The CBN's circular, signed by Oladimeji Yisa Taiwo from the Payments System Management Department, emphasised the importance of this measure for better tracking and monitoring of electronic transactions throughout Nigeria.

“To achieve the objective of tracking electronic transactions in Nigeria, the Central Bank of Nigeria granted a Payment Terminal Service Aggregator license to Nigeria Interbank Settlement System Plc in August 2011. In line with this, we direct acquirers to route all PoS transactions through any CBN-licensed Payment Terminal Service Aggregator,” the circular stated

In addition, PTSAs are mandated to forward PoS transactions only to processors that are certified by the relevant Payment Scheme, nominated by the acquirer, and licensed by the CBN.

This directive follows a recent deadline for PoS agents to register their businesses with the Corporate Affairs Commission (CAC). The CAC has begun enforcing compliance by shutting down unregistered PoS businesses. This move is part of broader efforts to curb frequent fraud incidents associated with PoS terminals and align with the CBN's broader strategy to prevent trading in cryptocurrencies and virtual currencies.

The CBN’s latest directive also comes in the wake of a report from Nigeria Inter-Bank Settlement System Plc, which revealed that PoS terminals were involved in 26.37% of fraud incidents reported in 2023.

The new regulations aim to address these concerns by improving transaction tracking and ensuring that PoS terminals are used in a secure and regulated manner. As the deadline approaches, PSPs and PoS operators are advised to make necessary adjustments to comply with the CBN’s enhanced routing guidelines.

CBN clears IMTOs to access naira for settlement of diaspora remittances

Meanwhile, TheRadar had reported that the Central Bank of Nigeria had granted access to International Money Transfer Operators (IMTOs) to access naira directly from the CBN window or through Authorised Dealer Banks (ADBs) to settle transactions for the sale of foreign exchange (FX) in the market.

IMTOs are companies approved by the CBN to facilitate the transfer of funds from individuals or entities in the diaspora to recipients in Nigeria and the payment of the equivalent amount to a beneficiary through a clearing network to which the IMTO belongs.