The Federal government of Nigeria through the Corporate Affairs Commission (CAC) has ordered 1.9 million PoS companies to register their business as part of plans to combat fraud.
This agreement was reached on Monday during a meeting between Fintechs and the Registrar-General CAC, Hussaini Ishaq Magaji, in Abuja.
Speaking at the meeting, the CAC boss noted that the directive is aimed at safeguarding the businesses of Fintech customers and strengthening the economy. He further stressed that the action was equally 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.
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According to the CAC, the timeline allotted for the registration is for a period of two months, which will expire on July 7, 2024
A statement by the commission read,
“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. The agreement was reached today during a meeting between Fintechs and the Registrar-General, CAC, Hussaini Ishaq Magaji, in Abuja.”
The CAC’s recent directive comes as fraudulent incidents involving PoS terminals have continued to surge in the country. According to a 2023 fraud report by the Nigeria Inter-Bank Settlement System Plc (NIBSS), PoS terminals accounted for 26.37% of fraud incidents in 2023.
Although PoS has brought significant convenience to financial transactions in Nigeria, which has spared bank customers from enduring extended queues at the banking Hall and ATMs. Meanwhile, despite its positive impact on the populace and the economy, there is a growing sense of unease among Nigerians using the system to carry out transactions due to the rising cases of fraud.
These PoS fraudulent transactions have raised concerns which have spurred different bodies to roll out policies and measures to mitigate fraud in the system. In line with this, in early 2024, Tekedia reported that the Central Bank of Nigeria, in partnership with the Nigerian Electronic Fraud Forum (NeFF), is working alongside the Association of Mobile Money and Banking Agents of Nigeria (AMMBAN) to introduce a new functionality on Point of Sale (PoS) terminals according to reports.
This feature aims to identify potential fraudulent transactions at agents’ locations by prompting for specific Know Your Customer (KYC) details before completing certain transactions.
Reports also revealed that a coalition of security agencies, including the Nigerian police, Department of State Services (DSS), AMMBAN, and NIBSS, has been formed to facilitate the seamless tracking of fraudsters operating at agent locations.