The Central Bank of Nigeria (CBN) has mandated that all Payment Service Providers (PSPs) begin tracking Point of Sale (PoS) transactions. In a directive issued on September 11, 2024, the CBN has given service providers a 30-day deadline to comply with new routing guidelines aimed at enhancing the monitoring of electronic payments across the country.
According to the circular signed by Oladimeji Yisa Taiwo from the CBN’s Payments System Management Department, all PoS transactions from merchant and agent locations—whether physical or electronic—must now be routed through any CBN-licensed Payment Terminal Service Aggregator (PTSA). This move is intended to decentralize transaction processing, addressing concerns about the risks associated with having a single aggregator.
Historically, the Nigeria Interbank Settlement System Plc (NIBSS) was the sole PTSA licensed by the CBN in 2011. However, to foster competition and improve service delivery, the CBN awarded a second PTSA license to Unified Payment Services Limited (UPSL) on April 19, 2024.
The CBN’s directive includes several key requirements for PSPs:
- Mandatory Routing: All PoS transactions must be routed through a licensed PTSA, ensuring that transaction data is properly monitored.
- Processor Certification: PTSAs are required to send transactions only to processors certified by the relevant payment schemes, which must be nominated by the acquirer and licensed by the CBN.
- Monthly Reporting: Both Payment Terminal Service Providers (PTSPs) and PTSAs must submit detailed monthly reports to the CBN, outlining their operations and compliance with the new guidelines.
This initiative comes in response to rising concerns over fraud in the PoS sector, which accounted for 26.37% of fraud incidents in 2023, according to a report by the Nigeria Inter-Bank Settlement System Plc. The CBN’s actions reflect a commitment to strengthening the integrity and security of Nigeria’s payment ecosystem.
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