The Corporate Affairs Commission (CAC), acting on behalf of the Federal Government, has mandated all Point of Sales (PoS) companies to register their agents, merchants, and individuals within a two-month timeframe. This registration is necessary to comply with both legal obligations and the guidelines set forth by the Central Bank of Nigeria (CBN). On May 6, 2024, Fintech companies and the Registrar-General CAC, Hussaini Ishaq Magaji, came to an agreement during a meeting held in Abuja.
Also, the Nigeria Inter-Bank Settlement System (NIBSS) reported that merchants and individuals across the country have set up more than 1.9 million PoS terminals for payment transactions. Addressing those present at the meeting, the head of the CAC discussed how the new measure was designed to protect the financial interests of Fintech customers and bolster the country’s economy. Additionally, he emphasized that the decision was supported by both Section 863, Subsection 1 of CAMA P and the CBN guidelines on agent banking issued in 2013.
CBN’s rule also includes the ban on trading cryptocurrency.
Furthermore, the deadline for registration set by the head of CAC, ending on July 7, 2024, was clarified to not have any specific targets towards groups or individuals. The main purpose behind this timeline is to ensure businesses are adequately protected. The commission announced that the Corporate Affairs Commission (CAC) and financial technology companies in Nigeria, commonly referred to as PoS operators, have decided to complete the registration of their agents, merchants, and individuals with the CAC.
This is to be done within a period of two months, in compliance with the laws and regulations set forth by the Central Bank of Nigeria. In Abuja, Fintechs and the Registrar-General, CAC, Hussaini Ishaq Magaji, came to an agreement during a meeting. The Central Bank of Nigeria has decided to implement a new rule due to the high number of fraud cases involving POS terminals. This rule also includes the ban on trading cryptocurrency and any virtual currency.
Fintech companies are ordered to cease accepting new customers.
More so, a report by the Nigeria Inter-Bank Settlement System Plc revealed that Point of Sale (POS) terminals were responsible for 26.37% of fraud incidents in 2023. The Central Bank of Nigeria (CBN) recently ordered popular fintech companies such as Kuda, Opay, PalmPay, and Moniepoint to cease accepting new customers. Additionally, these fintech companies were directed to advise their existing customers against participating in cryptocurrency or any form of virtual currency trading on their platforms.
Failure to comply may result in the suspension of accounts involved in such transactions. The CBN’s decision was associated with an audit that is currently being conducted on the fintechs’ Know-Your-Customer procedures. These fintechs have been facing increased scrutiny due to suspicions of money laundering and terrorism financing in recent months. Prior to the CBN’s instruction, a court order was secured by the Economic and Financial Crimes Commission (EFCC) to lock down a minimum of 1,146 bank accounts.
Related Article: Nigeria Loses ₦1.95B to POS Fraud in One Year
Additionally, the accounts belonged to different individuals and companies suspected of engaging in illicit foreign exchange activities. Opay made it clear in a statement released on May 3, 2024, that any customers found breaking its policy on cryptocurrency trading will face severe consequences in line with the regulations set by the Central Bank of Nigeria. It was mentioned that numerous individuals in the fintech sector expressed their commitment to working together with the commission to guarantee a smooth and successful execution of the directive.
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