The Central Bank of Nigeria (CBN) has recently issued a 60-day ultimatum for Point of Sale (PoS) operators to complete their registration with the Corporate Affairs Corporation (CAC). This decision was made during a meeting between Fintechs and the Registrar-General of CAC, Hussaini Ishaq Magaji, in Abuja.
According to the Nigeria Inter-Bank Settlement System, there are currently over 1.9 million PoS terminals deployed by merchants and people across the country. The aim of this ultimatum is to safeguard the businesses of Fintech’s customers and strengthen the economy.
The CAC boss emphasized that this action is supported by Section 863, Subsection 1 of the Companies and Allied Matters Act, CAMA 2020, as well as the 2013 CBN guidelines on agent banking. The registration timeline, which expires on July 7, 2024, is not targeted at any specific groups or individuals but is genuinely aimed at providing protection for businesses.
In a statement released by the commission, it was stated that “The Corporate Affairs Commission and fintech companies in Nigeria, better known as PoS operators, have agreed to a two-month timeline to register their agents, merchants, and individuals with the CAC in line with legal requirements and the directives of the Central Bank of Nigeria.”
This new directive comes in response to the increasing incidents of fraud involving PoS terminals and the recent plans by the Central Bank of Nigeria to prohibit trading in cryptocurrency or any virtual currency. According to a fraud report by the Nigeria Inter-Bank Settlement System Plc, PoS terminals accounted for 26.37% of fraud incidents in 2023.
Last week, the CBN instructed major fintech firms such as Kuda, Opay, PalmPay, and Moniepoint to stop onboarding new customers and warned their existing customers against trading in cryptocurrency or any virtual currency on their apps. The CBN’s move is part of an ongoing audit of the Know-Your-Customer process of these fintechs, which have been under scrutiny due to concerns about money laundering and terrorism financing.
Prior to the CBN’s directive, the Economic and Financial Crimes Commission had obtained a court order to freeze at least 1,146 bank accounts owned by individuals and companies allegedly involved in illegal foreign exchange transactions.
In response to these developments, OPay, a major fintech firm, announced that it would take strict measures against customers who violate its policy, aligning with the Central Bank of Nigeria’s stance on cryptocurrency trading.
During the meeting, several speakers from the fintech industry expressed their willingness to collaborate with the commission to ensure the smooth implementation of the directive. However, they also emphasized the need for adequate and collective sensitization to ensure that the exercise achieves the desired results.
