CBN orders PoS transaction tracking

The Central Bank of Nigeria (CBN) has directed all Payment Service Providers to route Point of Sale (PoS) transactions from merchant and agent locations—both physical and electronic—through an approved CBN Payment Terminal Service Aggregator (PTSA).

In a circular issued on Thursday by Oladimeji Yisa Taiwo from the CBN’s Payments System Management Department, the bank mandated service providers to comply with the new routing guidelines within 30 days.

The directive aims to enhance the monitoring of electronic transactions and decentralise PoS transaction routing to prevent centralisation under a single entity.

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.”

The move follows the September 5th deadline for PoS agents to register their businesses with the Corporate Affairs Commission (CAC).

The CAC has since begun shutting down PoS businesses that failed to comply, despite legal challenges to the directive.

The new guidelines come amidst increasing concerns over fraud involving PoS terminals, which accounted for 26.37% of fraud incidents in 2023, according to a report by Nigeria Inter-Bank Settlement System Plc.