Nigeria’s Point of Sale (PoS) agent network has been greatly impacted by regulations, with The Central Bank of Nigeria (CBN) recently enacting modifications that have drawn positive reaction and criticism. In an effort to promote Security and accountability in the industry, the new regulations mandate that PoS agents register with the Corporate Affairs Commission (CAC) and acquire a license from the CBN. But these actions have brought up a number of difficulties, especially for small-scale businesses. Although these criteria are meant to guarantee stability and accountability, many PoS operators who run their firms as microbusinesses find them difficult to comply with.
CAC registration and licensing fees are seen as an exorbitant expense particularly for agents with low profit margins. Meanwhile, some believed that the advantages of registration might exceed the disadvantages, provided there is adequate knowledge, support, and streamlined registration procedures. For a cost of ₦19,500, several PoS service providers, such as PalmPay, have made registration more accessible by integrating the CAC registration platform within their business application. Additionally, PalmPay has been engaging stakeholder groups in various states to educate their members of the importance of registering their business.
AMMBAN claimed the CBN directive is revenue-driven.
Nevertheless, not all agents find these measures adequate, and their efficacy varies. The certification costs, in the opinion of many agents, may have an impact on their small enterprises. Some agents comply with the new standards by using their existing CAC credentials from other businesses but still fear repercussions. Advocates have urged regulators to support the agents more, particularly in rural areas. In locations that are underserved, fewer people will have access to financial services when non-compliant agents are removed. For years now, this network has generated jobs and ease online transaction processes, which greatly boost Nigeria’s economy.
Therefore, a decline in their population could hinder Economic Expansion and lessen the broader effect of financial inclusion schemes. The Association of Mobile Money and Bank Agents of Nigeria (AMMBAN), had also criticized the CBN directive, claiming it is prohibitive and revenue-driven, with the potential to reduce financial access in underserved areas and result in job losses. Stakeholders encourage phased implementation of the rules, increased support for rural agents, and simplification of the registration process in order to sustain the expansion of the PoS network and financial inclusion with the country.
Several agents are worried about the cost of registration.
This regulatory action, which is a directives from the Central Bank, aims to improve economic security, lessen fraud, and coordinate with initiatives to restrict the Trade of cryptocurrencies. It is also reportedly backed by Section 863, Subsection 1 of the Companies and Allied Matters Act, CAMA 2020, and the 2013 CBN guidelines on agent banking. Although the project offers numerous advantages, several agents are worried about the cost of registration and how it would affect their businesses, particularly those in remote areas. Regardless, the government is adamant about upholding the enforcement of the Regulation in spite of differing viewpoints, highlighting its function in enhancing business security and legitimacy.
In the long run, formal certification of agents can promote Economic Growth by improving credibility, access to credit, payment of taxes, and business brand protection. However, given the unwillingness of certain agents to comply, it might eventually impede the network’s continued expansion. According to the most recent data, Nigeria’s Point of Sale agent network has grown significantly, which is consistent with the nation’s efforts to promote greater financial inclusion and digital transactions. The networks are becoming an essential component of the Informal Economy and have generated a great deal of job opportunities. There are more than 3.7 million PoS terminals in Nigeria, of which roughly 2.7 million are active and deployed currently.
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The expansion of financial services into rural regions and the growing demand for cashless transactions have been the main drivers of this rise. PoS transactions are now far more valuable and have a higher volume. For instance, the Nigeria Inter-Bank Settlement System (NIBSS) reported in 2023 that the volume of PoS transactions surpassed 1 billion, with transaction values surpassing ₦15 trillion (about $36.6 billion). On a monthly basis, this transaction has been steadily increasing reportedly reaching approximately ₦1.15 trillion in December 2022 alone, indicating the spike in usage over the holiday season.