CBN Cracks Down on POS Fraud

CBN Takes Action Against PoS Fraud

“To achieve the objective of tracking electronic transactions in Nigeria, the Central Bank of Nigeria, in August 2011, granted a Payment Terminal...”

CBN cracks down on PoS fraud with new directive, shutting down unregistered businesses and aiming to prevent cryptocurrency trading, as PoS terminals account for 26.37% of fraud incidents in 2023.

 

The Central Bank of Nigeria (CBN) has initiated a transaction monitoring system for Point of Sale (POS) operators to ensure regulatory adherence and prevent fraudulent activities.

The registration requirement aims to curb rising PoS terminal fraud, aligning with the CBN's efforts to prevent cryptocurrency trading. A recent Nigeria Inter-Bank Settlement System report revealed that PoS terminals were involved in 26.37% of 2023's fraud cases.

“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,” the CBN circular stated.

“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 move follows the recent deadline of September 5, which required PoS agents to formally register their businesses with the Corporate Affairs Commission, marking another step in the CBN's efforts to regulate and oversee the PoS sector.

The CAC has enforced the directive, shutting down unregistered PoS businesses, despite a court challenge.

The move aims to tackle rising PoS terminal fraud, part of broader efforts to prevent cryptocurrency trading. Data shows PoS terminals were linked to 26.37% of fraud cases in 2023, according to Nigeria Inter-Bank Settlement System.