CBN Directs Payment Providers to Route All PoS Transactions Through Licensed Aggregators

The Central Bank of Nigeria (CBN) has issued a directive to Payment Service Providers, requiring that all transactions conducted through Point of Sale (PoS) terminals be routed through licensed Payment Terminal Service Aggregators (PTSAs).

This move aims to enhance the monitoring and management of electronic payments in Nigeria.

In a circular signed by Oladimeji Yisa Taiwo from the CBN’s Payments System Management Department, the new requirement comes with a 30-day compliance deadline. The directive mandates that both physical and electronic PoS transactions be routed through any CBN-licensed PTSA.

The circular stated,
“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. 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 directive is part of a broader effort by the CBN to decentralize PoS transaction management and address concerns about centralization under a single entity. PTSAs are required to send PoS transactions only to processors certified by the relevant Payment Scheme, as chosen by the acquirer and licensed by the CBN.

This announcement follows the expiration of a prior 5th September deadline that required PoS agents to register their businesses with the Corporate Affairs Commission (CAC). Despite legal challenges, the CAC has since shut down non-compliant PoS operations.

The increased regulation of PoS services comes as concerns over fraud involving PoS terminals continue to rise. According to a report by the Nigeria Inter-Bank Settlement System Plc, PoS terminals accounted for 26.37% of fraud incidents in 2023.