CBN introduces new rule to enhance PoS transaction security

In a bid to improve the security and tracking of electronic transactions, the Central Bank of Nigeria (CBN) has issued a directive requiring all Payment Service Providers to route Point of Sale (PoS) transactions through approved CBN Payment Terminal Service Aggregators (PTSAs).

Effective within 30 days, this new rule aims to reduce the concentration of PoS transaction management under a single entity and prevent fraud associated with PoS terminals. The CBN’s Payments System Management Department has mandated that all PoS transactions must go through a CBN-licensed PTSA, which will then route transactions to processors certified by the relevant Payment Scheme and licensed by the CBN.

This update follows the recent deadline for PoS agents to register their businesses with the Corporate Affairs Commission (CAC), which has begun enforcing compliance by shutting down unregistered PoS businesses. The move is part of the CBN’s efforts to address fraud and prevent cryptocurrency trading, with a report from Nigeria Inter-Bank Settlement System Plc revealing that PoS terminals were involved in 26.37% of fraud cases in 2023.

By introducing this new rule, the CBN aims to enhance the security and integrity of electronic transactions in Nigeria, ensuring a safer and more reliable payment system for all stakeholders.