Regulatory Hurdles Threaten Growth of Nigeria’s PoS Agent Network

Nigeria’s Point of Sale (PoS) agent network has seen remarkable growth in recent years, significantly expanding financial inclusion and facilitating transactions in underserved areas. 

However, recent regulatory changes now pose a threat to this progress.

Recall that on May 2024, the Central Bank of Nigeria (CBN) in a decisive move to enhance transparency and accountability within the financial sector, mandated all Point Of Sale (POS) operators to register with the Corporate Affairs Commission (CAC).

For POS merchants, this means they must formalize their operations by registering as business entities with the CAC. The action backed by Section 863, Subsection 1 of the Companies and Allied Matters Act, CAMA 2020 as well as the 2013 CBN guidelines on agent banking aims to safeguard businesses and strengthen the economy.

It came against the backdrop of frequent fraud incidents involving PoS terminals, after it accounted for 26.37 percent of fraud incidents in 2023, according to a fraud report by the Nigeria Inter-Bank Settlement System Plc (NIBSS).

However, while this directive aims to ensure accountability and stability, many argue that they pose significant challenges for many PoS agents, who often operate as micro-businesses, and the broader economy. For many agents, the registration costs are prohibitively high, especially as they often operate on thin margins.

Several operators said the registration, which would require money, would impact customer transaction costs and eventual service charge increase, while also noting that the directive negated the CBN’s financial inclusion initiative.

Meanwhile, despite these challenges, some operators believe the benefits of registration outweigh the costs. They argue that with proper education, support, and simplification of the registration process, Nigeria can further enhance financial inclusion and economic stability. 

Source: Businessday Nigeria