CBN orders payment providers to track all PoS transactions

The Central Bank of Nigeria (CBN), on behalf of all Payment Service Providers, has directed them to route all Point of Sale (PoS) transactions—whether at physical or virtual merchant and agent locations—through a Payment Terminal Service Aggregator that has been approved by the CBN.

Additionally, CBN set a 30-day deadline for service providers to adhere to the updated routing specifications for Point of Sale transactions.

All PoS transactions from merchant and agent locations must now be routed through any PTSA licensed by the CBN, according to a circular issued by the central bank and signed by Oladimeji Yisa Taiwo on behalf of the CBN’s Payments System Management Department on Thursday.

In response to concerns regarding the centralization of these transactions under a single body, this action attempts to decentralize PoS transaction routing and enhance the monitoring of electronic transactions throughout Nigeria.

“In August 2011, the Central Bank of Nigeria awarded Nigeria Interbank Settlement System Plc a Payment Terminal Service Aggregator license with the goal of tracking electronic transactions in the country. To this end, the CBN hereby instructs acquirers to use any CBN-licensed Payment Terminal Service Aggregator for all transactions from PoS terminals at merchant and agent locations, regardless of whether the terminals are electronic or physical.

In the circular, it was stated 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.”
This happened after the time for PoS agents to legally register their firms with the Corporate Affairs Commission expired on September 5th.

The CAC recently declared that it has started taking severe measures, including closing down PoS enterprises that neglected to register, despite the mandate being contested in court.

The CBN’s intentions to forbid trading in cryptocurrencies or virtual money are coupled with the order on PoS company registration, which was issued in the wake of numerous fraud occurrences utilizing PoS terminals.