Business

CBN Introduces New Regulations for Point of Sale (PoS) Transactions; See Details

Published by Tope Fakinlede on September 13th, 2024.

CBN Introduces New Regulations for Point of Sale (PoS) Transactions; See Details

The Central Bank of Nigeria (CBN) has unveiled new guidelines for Point of Sale (PoS) transactions, aiming to diversify the processing channels. Under the new rules, all PoS transactions must be routed through either the Nigeria Interbank Settlement System (NIBSS) or Unified Payment Services Limited (UPSL), breaking the previous exclusivity of NIBSS in transaction processing.

According to a circular issued on September 11, 2024, to all payment service providers, the CBN has mandated that providers begin regularizing their operations with Payment Terminal Service Aggregators (PTSAs) and notify the CBN of their compliance within 30 days.

The CBN had initially granted a PTSA license to NIBSS in August 2011 to track electronic transactions. However, due to concerns about monopolistic practices, a second PTSA license was awarded to UPSL on April 19, 2024.

As of now, the CBN requires that all PoS transactions from merchant and agent locations, whether processed via physical or electronic terminals, be routed through any CBN-licensed PTSA. The updated regulations specify that PTSAs must direct PoS transactions only to processors certified by relevant Payment Schemes and licensed by the CBN. This change allows acquirers greater flexibility in choosing their processors and PTSAs.

Additionally, Payment Terminal Service Providers (PTSPs) must ensure their PoS devices and applications are configured to route transactions through the designated PTSA. PTSPs are also required to submit monthly reports to the CBN, detailing the number of merchants and agents they manage and the PTSA services used. Each PTSA must provide a monthly report to the CBN on all transactions processed through their systems, with submissions due within seven days of the end of each month.