CBN requires all PoS transactions to go through licensed aggregators

The Central Bank of Nigeria (CBN) has mandated that all payment service providers (PSPs) route transactions from point of sale (POS) terminals at merchant and agent locations through its licensed Payment Terminal Service Aggregators (PTSAs).

This directive, issued in a circular dated September 11, 2024, aims to standardize the functionality and availability of POS devices across the industry.

The CBN emphasized that PSPs must comply by routing transactions through the Nigeria Interbank Settlement System Plc (NIBSS) and Unified Payment Services Limited (UPSL), the two licensed PTSAs.

The directive requires PSPs to update their systems accordingly and report compliance within 30 days.

 “In order to achieve the objective of tracking electronic transactions in Nigeria, the Central Bank of Nigeria (CBN) in August 2011, granted a Payment Terminal Service Aggregator (PTSA) licence to Nigeria Interbank Settlement System Plc (NIBSS),” the apex bank said.

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“As part of efforts to mitigate the concerns regarding channelling Point of Sale (PoS) transactions through a single aggregator, the CBN on April 19, 2024, granted a second PTSA licence to Unified Payment Services Limited (UPSL).

“In furtherance of the above, the CBN hereby directs as follows: acquirers are henceforth required to route all transactions from PoS terminals at merchant and agent locations, whether on physical or electronic PoS terminals, through any CBN-licensed Payment Terminal Service Aggregator (PTSA).

“PTSAs are required to send PoS transactions to only Processors certified by the relevant Payment Scheme, nominated by the Acquirer and licensed by CBN.

“All licensed Processors must be integrated with both PTSAS, thereby allowing Acquirers the flexibility to choose which Processor(s) and PTSA to utilize

“All Payment Terminal Service Providers (PTSPs) must ensure that their PoS devices. Applications are configured to route transactions through any PTSA, as directed by the Acquirer.

“All PTSPs shall submit monthly returns to the CBN, detailing the number of merchants and agents they manage, along with the PTSA services used to route the corresponding transactions.

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“Each PTSA is required to submit monthly returns to the CBN, detailing all transactions processed through their platforms.”

The financial regulator added that all PSPs and PTSAs are expected to submit monthly returns to CBN’s director, payments system management department, not later than seven days after the end of each month.

The central bank also outlined that all licensed processors must integrate with both PTSAs, giving acquirers the flexibility to choose which processor and aggregator to utilize. Additionally, PSPs and PTSAs are required to submit monthly transaction reports to the CBN, with non-compliance leading to sanctions.

The move is part of the CBN’s broader efforts to ensure the tracking and standardization of electronic transactions in Nigeria, following concerns about channeling POS transactions through a single aggregator.