The Central Bank of Nigeria (CBN) has directed all Payment Service Providers to route transactions from PoS terminals at merchant and agent locations—both physical and electronic—through a CBN-approved Payment Terminal Service Aggregator (PTSA).
This directive was detailed in a circular issued by Oladimeji Yisa Taiwo on behalf of the CBN’s Payments System Management Department.
The CBN stated that all PoS transactions must now go through licensed PTSAs, and service providers have been given a 30-day deadline to comply with the new routing guidelines. This measure is intended to improve the monitoring of electronic transactions and decentralise PoS routing, addressing concerns over centralisation.
The circular read, “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.”
“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 development comes after the September 5th deadline for PoS agents to register their businesses with the Corporate Affairs Commission (CAC) expired.
Despite legal challenges to the directive, the CAC has begun taking strict measures, including shutting down non-registered PoS businesses.
The registration mandate is driven by frequent fraud incidents involving PoS terminals and the Central Bank of Nigeria’s efforts to curb cryptocurrency and virtual currency trading.
A report by the Nigeria Inter-Bank Settlement System Plc revealed that PoS terminals were responsible for 26.37% of fraud cases in 2023.
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