The Central Bank of Nigeria (CBN) has issued a directive mandating that all Point of Sale (PoS) operators must route transactions through licensed Payment Terminal Service Aggregators (PTSAs).
In a circular posted on the CBN’s website, the bank explained that this initiative is aimed at improving the tracking and management of electronic transactions within Nigeria.
“As part of efforts to address concerns regarding routing all Point of Sale transactions through a single aggregator, the CBN, on April 19, 2024, granted a second PTSA license to Unified Payment Services Limited,” the CBN stated.
New Requirements for Acquirers and Processors
The CBN outlined the following new requirements:
- Acquirers (institutions responsible for processing payments from PoS terminals) must now channel all transactions, both physical and electronic, through any CBN-licensed PTSA.
- PTSAs are only permitted to send PoS transactions to certified processors, nominated by the acquirers and licensed by the CBN.
The Nigeria Interbank Settlement System Plc (NIBSS) was the first company to receive a PTSA license in 2011, and Unified Payment Services Limited became the second licensee in April 2024. This move was made to provide flexibility and avoid concentrating all transactions with a single aggregator.
Processor and Service Provider Integration
The CBN further clarified that:
- Licensed processors must integrate with both licensed PTSAs to allow acquirers the option to select their preferred service provider.
- Payment Terminal Service Providers (PTSPs), responsible for deploying and managing PoS terminals, are required to ensure their devices and applications are compatible with any PTSA chosen by acquirers.
Reporting Obligations
In addition to routing transactions through licensed aggregators, PTSPs must submit monthly reports to the CBN, detailing the number of merchants and agents they manage, as well as the PTSA services utilized.
Similarly, each PTSA must provide the CBN with monthly reports on all transactions processed through their platforms. These reports must be submitted to the Director of the Payments System Management Department within seven days after the end of each month.
30-Day Compliance Window
The CBN has given PoS operators 30 days to comply with this directive, warning that failure to do so will result in appropriate sanctions.
It is important to recall that on July 7, the Corporate Affairs Commission announced that all PoS operators in Nigeria must register with the commission by September 5.