The directive, issued on 17 December 2024, aims to promote a cashless economy and enhance financial transparency in agency banking operations.

According to a circular signed by Oladimeji Yisa Taiwo on behalf of the Director of Payments System Management, the policy mandates all Deposit Money Banks, Microfinance Banks, Mobile Money Operators, and Superagents to comply with immediate effect. 

These measures aim to simplify agent banking services, prevent fraud, and encourage the adoption of electronic payment systems.

7 Key Highlights of the New Policy

1. Daily Cash-Out Limit: PoS agents must limit individual customer withdrawals to ₦100,000 per day.
2. Agent Cumulative Limit: Each PoS agent’s total daily transactions must not exceed ₦1.2 million.
3. Weekly Withdrawal Cap: Customers can withdraw a maximum of ₦500,000 per week, regardless of the channel used.
4. Separation of Services: PoS agents must clearly distinguish their banking activities from other merchant services and use an approved Agent Code (6010) for all transactions.
5. Float Accounts Usage: Transactions must be exclusively conducted through float accounts maintained with principal institutions.
6. Transaction Reporting: Agents are required to send daily transaction reports electronically to the Nigerian Inter-Bank Settlement System (NIBSS) using a template provided by the CBN.
7. Monitoring and Compliance: Institutions are tasked with monitoring agent accounts and ensuring all transactions adhere to the guidelines.

Monitoring and Penalties

The CBN has stressed that it will conduct regular oversight to ensure compliance. Institutions responsible for agent banking services are required to monitor linked accounts and report any unauthorised activities. Violations of these directives will attract heavy penalties, ranging from monetary fines to administrative sanctions.

While the policy aims to bolster financial inclusion and reduce fraud, it could lead to challenges for PoS operators and customers. Agents who depend on high-volume transactions may face operational difficulties, while customers in rural areas might experience reduced access to cash, especially during peak periods like the festive season.

Towards a Cashless Economy

This directive is part of the CBN’s strategy to promote a cashless financial system in Nigeria. In addressing operational irregularities and encouraging the use of electronic payment methods, the apex bank hopes to enhance financial accountability and security.

The CBN has urged all stakeholders to comply with the new guidelines and contribute to a stronger and secure banking system in the country.

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Payment Service Providers (PSPs) have been given a 30-day deadline to align their operations with these new rules, which require compliance by 11 October 2024.

This latest development aligns with the CBN’s goal to decentralise the routing of PoS transactions, ensuring a more efficient and transparent payment process. 

Dated 11 September 2024, the circular was signed by Oladimeji Yisa Taiwo of the CBN’s Payments System Management Department. It mandates that all PoS transactions — whether physical or online — be routed through any Payment Terminal Service Aggregator (PTSA) licensed by the CBN. 

This directive expands on a previous framework that placed control of PoS routing under a single aggregator. The new guideline is intended to facilitate competition and decentralise transaction management.

In the past, the Nigeria Interbank Settlement System Plc (NIBSS) held the sole PTSA license after being granted the authority by the CBN in 2011. However, in a bid to enhance competition and improve service delivery, the CBN issued a second PTSA license to Unified Payment Services Limited (UPSL) in April 2024. 

This step is expected to reduce reliance on a single body and enhance operational transparency in Nigeria’s electronic payments industry.

Key elements of the directive include a requirement for payment service providers (PSPs) to route all PoS transactions through a CBN-licensed PTSA. 

Processors that handle these transactions must also be certified by relevant payment schemes and nominated by the acquirers, who are given the flexibility to choose their processors. 

In addition, payment terminal service providers (PTSPs) must ensure their PoS terminals are configured in line with the new routing requirements.

The CBN’s new rules also introduce monthly reporting obligations for both PTSPs and PTSAs. PTSPs must provide reports detailing the number of merchants and agents they service and how transactions are routed, while PTSAs are required to submit data on all processed transactions. 

These reports must be submitted to the Director of the Payments System Management Department within seven days of the end of each month. PSPs have been given 30 days to comply with the new guidelines and must formally notify the CBN of their compliance.

This directive comes at a time when the Corporate Affairs Commission (CAC) is taking action against Point of Sale operators that have not registered their businesses. 

The deadline for registration passed on 5 September, and the Commission is now preparing to penalise non-compliant operators, pointing to potential involvement in unlawful activities. 

Fintech groups, particularly the Association of Mobile Money and Bank Agents in Nigeria (AMMBAN), are contesting the CAC’s directive in court, arguing that the mandatory registration is unlawful.

The new PoS guidelines by the CBN aim to enhance the security and efficiency of electronic payments in Nigeria. It also aligns with the growing focus on reducing fraud in the payments sector, with a report from the Nigeria Inter-Bank Settlement System Plc (NIBSS) revealing that PoS terminals were responsible for over a quarter of fraud incidents in 2023. 

The CBN’s new measures are designed to counter such risks and ensure a safer, more transparent electronic payments environment.

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