The Central Bank of Nigeria (CBN) has mandated that all Payment Service Providers must route transactions from Point of Sale (PoS) terminals, whether physical or electronic, through a CBN-approved Payment Terminal Service Aggregator (PTSA).
This directive includes a 30-day deadline for service providers to adhere to the new routing guidelines.
The aim of this measure is to enhance the monitoring of electronic transactions nationwide and decentralize PoS transaction routing, which had previously been concentrated under a single entity. The CBN’s circular, issued on Thursday and signed by Oladimeji Yisa Taiwo from the Payments System Management Department, specifies that all PoS transactions must now be processed through a CBN-licensed PTSA.
The circular states, “To improve the tracking of electronic transactions in Nigeria, the Central Bank of Nigeria granted a PTSA license to Nigeria Interbank Settlement System Plc in August 2011. Accordingly, all PoS transactions at merchant and agent locations must be routed through a CBN-licensed PTSA.”
Additionally, PTSA operators are required to forward PoS transactions only to processors certified by the relevant Payment Scheme, nominated by the Acquirer, and licensed by the CBN.
This directive follows the recent expiration of the 5th September deadline for PoS agents to officially register their businesses with the Corporate Affairs Commission (CAC). Despite legal challenges, the CAC has begun taking serious measures, including shutting down non-compliant PoS businesses.
This move is part of the CBN’s broader strategy to combat fraud and regulate the cryptocurrency market, responding to a report from Nigeria Inter-Bank Settlement System Plc, which revealed that PoS terminals were involved in 26.37% of fraud incidents in 2023.
