Nigeria’s Central Bank Orders Payment Service Providers to Track Point of Sale Transactions

The Central Bank of Nigeria (CBN) has issued a directive to payment service providers to begin tracking all Point of Sale (PoS) transactions. The move aims to mitigate concerns over the channeling of PoS transactions through a single aggregator. The apex bank has given a 30-day deadline to payment service providers to regularise with Payment Terminal Service Aggregators (PTSA).

According to a circular dated September 11, 2024, signed by CBN’s Director of Payments System Management, Oladimeji Taiwo, the CBN granted a second PTSA licence to Unified Payment Services Limited (UPSL) on April 19, 2024. The circular states that acquirers are now required to route all transactions from PoS terminals at merchant and agent locations through any CBN-licensed Payment Terminal Service Aggregator (PTSA).

The circular also outlines the requirements for Payment Terminal Service Providers (PTSPs) and Payment Terminal Service Aggregators (PTSAs). PTSPs must ensure that their PoS devices and applications are configured to route transactions through any PTSA, as directed by the Acquirer. PTSPs are also required to submit monthly returns to the CBN, detailing the number of merchants and agents they manage, along with the PTSA services used to route the corresponding transactions.

Each PTSA is required to submit monthly returns to the CBN, detailing all transactions processed through their platforms. The returns are expected to be submitted to the Director, Payments System Management Department, not later than seven days after the end of each month. Non-compliance with the directive will attract appropriate sanctions.

The move is expected to improve the efficiency and transparency of PoS transactions in Nigeria. The CBN’s directive aims to ensure that all PoS transactions are routed through a single aggregator, thereby reducing the risk of fraud and improving the overall payment system.