This growth results from the increasing reliance on PoS for both payments and cash withdrawals, driven by persistent cash shortages and the rapid expansion of fintech-powered PoS networks.

In terms of transaction volume, there was an 8% year-on-year increase, with 1.5 billion PoS transactions recorded in 2024 compared to 1.4 billion the previous year. The expansion of PoS terminals also surged, as deployments more than doubled to 5.5 million from 2.4 million in 2023—a 129% jump. 

Meanwhile, the number of registered PoS terminals rose from 3.5 million in December 2023 to 7.8 million by the end of 2024. However, over 2 million registered devices are yet to be deployed, revealing untapped prospects for further expansion.

The Rise of PoS: Fintechs Driving Financial Inclusion

Historically, commercial banks outshined PoS terminal deployment, but fintech companies have taken the lead in recent years. The demand for alternative payment solutions skyrocketed due to cash shortages at ATMs and long bank queues, making PoS transactions a convenient choice for millions of Nigerians.

Financial analyst Adewale Adeoye explained the shift, stating, “The rapid growth of PoS is not just an avenue for payment but also withdrawals have filled a gap for many Nigerians who struggle to access cash through banking channels such as ATM or teller withdrawals. It has also helped in bringing banking services closer to the rural areas, which do not have as many banks accessible to them.”

Fintech Firms Expanding PoS Networks

Leading fintech companies continue to push PoS adoption across the country. PalmPay, for example, has onboarded over 700,000 agents and is expanding its reach to all 774 local government areas in Nigeria. “This mission has fueled our efforts in deploying more PoS terminals across the country,” said Femi Hanson, head of Marketing and Communications at PalmPay.

Similarly, Moniepoint disclosed that it has deployed over 800,000 PoS terminals nationwide and is working on introducing an advanced PoS machine that integrates payment processing, inventory management, and transaction reconciliation. OPay, another major player in the sector, reported having over 500,000 PoS agents across the country.

Beyond convenience, the growth of PoS transactions has economic implications. Increased transactions contribute to government revenue through the Electronic Money Transfer Levy (EMTL), which applies to transactions of N10,000 and above. PoS businesses have also become a source of income for many Nigerians, particularly in rural areas where banking services remain limited.

However, there are still issues about rising PoS charges. With limited cash availability at bank ATMs, many Nigerians have no choice but to rely on PoS agents, who have increased transaction fees. In some parts of Lagos, withdrawing N5,000 now attracts a fee of N500—far higher than the N100 or N200 charged a few months ago.

PoS operators justify the higher charges, pointing to the increasing difficulty in sourcing cash, often purchasing it from alternative sources like petrol stations due to bank limitations.

Electronic Payments Reach Historic High

In a related development, electronic transactions in Nigeria surged to N1.07 quadrillion in 2024, surpassing the quadrillion mark for the first time. This represents a 79.6% increase from the N600 trillion recorded in 2023, according to NIBSS data. 

The NIBSS Instant Payment (NIP) system, which facilitates real-time interbank transfers, remains the dominant electronic payment method, processing transactions across mobile apps, USSD, internet banking, PoS terminals, and ATMs.

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.

This was repored by Nigeria Inter-Bank Settlement Systems (NIBSS), according to Sunnewsonline news story.

This is even as NIBSS revealed that transactions worth N204.5 trillion were performed electronically in Nigeria between January and July this year through its Instant Payment platform (NIP).

This shows a 40 per cent increase in e-payments in the country when compared with N145.8 trillion recorded in the same period last year.

The surge in electronic transactions shows that more Nigerians are embracing the cashless policy of the Central Bank of Nigeria (CBN).

The NIBSS Instant Payments (NIP) is an account-number-based, online-real-time Inter-Bank payment solution developed in the year 2011 by NIBSS.

It is the financial industry’s preferred funds transfer platform that guarantees instant value to beneficiaries.

The data for July also reflected a 31 per cent increase from N22.4 trillion last year to N29.3 trillion this year.