CEM REPORT, BUSINESS| The Nigerian financial landscape is undergoing a significant shift with the mandatory registration of Point of Sale (PoS) agents by the Corporate Affairs Commission (CAC). This new regulation, effective July 7th, 2024, applies to agents working with major fintech companies like OPay, Palmpay, and Moniepoint.
The CAC, led by Registrar-General Hussaini Magaji, announced the new directive after a meeting with PoS operators in Abuja. Magaji emphasized that the registration aligns with both legal requirements and directives from the Central Bank of Nigeria (CBN). This move highlights the collaborative effort between regulatory bodies to ensure a more secure and transparent financial ecosystem.
“The registration process is not intended to target specific groups or individuals,” clarified Magaji. “It’s genuinely aimed at providing protection for businesses.” He further cited Section 863, Subsection 1 of the Companies and Allied Matters Act (CAMA) 2020 and the 2013 CBN guidelines on agent banking as legal backing for this directive.
The rise of PoS terminals has revolutionized access to financial services in Nigeria, particularly for the unbanked population. However, concerns around fraud and a lack of transparency have prompted regulatory action.
According to the 2023 Annual Fraud Landscape report by the Nigeria Inter-Bank Settlement System (NIBSS), PoS channels were a prime target for fraudsters, with losses jumping from N2.6 billion in 2022 to N4.4 billion in 2023.
By mandating business registration, the CAC aims to create a more accountable system. Registered PoS agents will be identifiable entities, allowing for better tracking and potentially deterring fraudulent activities.
CAC to Facilitating a Smooth Registration Process
The statement from the CAC also highlighted efforts to ensure a smooth registration process for PoS agents. Special Adviser to President Bola Tinubu on ICT development and innovation, Tokoni Igoin Peter, pledged to facilitate the process in line with the administration’s “Renewed Hope Initiative.” This initiative aims to leverage technology for economic growth and development.
The CAC further stated that representatives from fintech companies like Opay, Momba, Palmpay Ltd., Paystack, Fairmoney Micro Finance Bank, Moniepoint, and Teasy Pay attended the meeting. Notably, the meeting concluded with a signed document expressing support for the project from participating fintechs.
However, some industry representatives reportedly expressed concerns about the need for adequate sensitization to ensure a successful implementation.
Potential Impact of PoS Agent Registration
The mandatory registration of PoS agents has the potential to significantly impact Nigeria’s financial landscape. Here’s a breakdown of some potential consequences:
Enhanced Transparency: Formal business registration will increase transparency in PoS transactions. Customers will be dealing with identifiable entities, reducing the risk of fraudulent activities.
Reduced Fraud: By making PoS agents accountable, the new regulation could deter fraudsters and contribute to a safer financial environment.
Improved Regulatory Oversight: The CAC will have a clearer picture of the PoS agent ecosystem, allowing for better monitoring and enforcement of regulations.
Potential Challenges: The registration process might pose initial challenges for some agents, particularly those unfamiliar with business registration procedures. Additionally, ensuring widespread awareness about the new directive among agents and customers is crucial.
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If You Ask Me
The mandatory registration of PoS agents in Nigeria represents a significant step towards a more secure and transparent financial system. With the deadline set for July 7, 2024, the coming months will be crucial for both the CAC and fintech companies. Collaboration between the CAC, CBN, and fintech companies is essential to ensure a smooth rollout and achieve the desired outcomes. Open communication and adequate sensitization will be key to addressing potential challenges and ensuring a successful implementation of this new regulation.
This move by the CAC signifies a growing focus on regulating the burgeoning fintech sector in Nigeria. As the PoS agent network continues to expand, fostering a safe and reliable environment will be critical to promoting financial inclusion and economic growth.
