Nigeria Orders Registration of 1.9 Million PoS Agents to Combat Fraud

In a move to increase transparency and reduce fraud, the Nigerian federal government has mandated that all Point of Sale (PoS) agents must register as businesses with the Corporate Affairs Commission (CAC). This directive aligns with the Central Bank of Nigeria’s (CBN) guidelines and existing legal requirements.

Fintech companies and PoS operators have a two-month deadline, expiring July 7, 2024, to complete the registration process. The initiative aims to protect consumers and strengthen the financial sector, especially as a recent Nigeria Inter-Bank Settlement System Plc (NIBSS) report revealed PoS terminals were involved in 26.37% of fraud cases in 2023.

“This measure safeguards the businesses of Fintech’s customers and strengthens the economy,” stated Hussaini Ishaq Magaji, Registrar-General of the CAC. Fintech representatives also pledged collaboration, emphasising the need for clear communication and awareness building for successful implementation.

Introduced by the CBN in 2013, PoS agents have been instrumental in boosting financial inclusion across Nigeria. Their widespread availability, with over 1.9 million terminals deployed, offers easy access to financial services for many citizens. Fintech companies like OPay, Moniepoint, and PalmPay rely heavily on these agents as part of their business model.

While the registration requirement aims to curb fraud, the process itself can be complex, potentially complicating new agent onboarding. Fintech companies may seek partnerships with the CAC to streamline the process and maintain their competitive edge.

Broader Context

The mandated registration of PoS agents aligns with a recent surge in regulatory attention focused on Nigeria’s fintech sector. This multi-faceted focus includes:

• Heightened Fraud Concerns: The CBN’s concern over PoS-related fraud is not isolated. The Economic and Financial Crimes Commission (EFCC) recently secured court orders to freeze numerous bank accounts linked to illegal foreign exchange activities. This suggests a coordinated effort to combat financial crimes across various channels.
• Cryptocurrency Crackdown: The CBN’s directive to restrict fintechs from onboarding new customers and its warnings against cryptocurrency trading underscore a desire for tighter control over digital assets. This stance reflects broader concerns about the potential use of crypto for illicit activities like money laundering and terrorism financing.
• Evolving Regulatory Landscape: These actions paint a picture of a rapidly changing regulatory landscape for Nigerian fintech. Companies navigating this shifting environment will need to prioritize compliance and transparency to maintain operations and build consumer trust.

Looking Ahead

The success of the PoS registration initiative depends on both effective implementation and the broader regulatory approach towards fintech. A balanced strategy that promotes innovation while addressing security concerns will be crucial for maintaining Nigeria’s position as a leading African fintech hub.