Level-of-Sale (PoS) terminal issuers in Nigeria, principally fintechs, are bracing for attainable service disruptions and income losses because the Central Bank of Nigeria’s (CBN) October 31 deadline for the obligatory geo-tagging of all PoS terminals approaches.
With over 8.3 million registered PoS terminals within the nation and 5.9 million already deployed as of March 2025, the dimensions of the train is huge.
The Nigeria Inter-Bank Settlement Techniques (NIBSS), forward of the implementation of this coverage, has directed all PoS issuers to submit particulars of all their issued terminals for recertification.
The method, NIBSS mentioned, will guarantee regulatory alignment, enhance location monitoring, and improve transparency in digital funds.
However whereas regulators see this as a step towards higher oversight and fraud prevention, fintechs and PoS operators warn that the price of compliance, tight timelines, and inflexible motion restrictions might sluggish market progress, disrupt providers, and stall revenues.
Fintechs worry income stall
Chatting with Nairametrics underneath the situation of anonymity, an government at a number one fintech agency described the regulation as one other burden that would dampen trade momentum, although the intention was good.
“It is a CBN regulation, and we’re all going to bear the associated fee someway. Apart from the technical prices, PoS progress goes to sluggish, and income goes to stall,” the official mentioned.
The manager additionally flagged potential disruptions to service provider providers because of the 10-meter motion restrict for tagged terminals.
“Quite a lot of retailers would abruptly realise their PoS will not be working, most likely as a result of they transfer a number of meters away from their administrative center to take care of a customer. That restrict goes to be a problem for a lot of,” he added.
One other fintech supply echoed comparable issues, explaining that the uncertainty had already compelled some issuers to halt growth plans.
“We now have technically stopped onboarding new PoS for now as a result of we’re centered on assembly the recertification deadline with NIBSS. The influence can be momentary, however there is no such thing as a doubt this can decelerate progress within the brief time period,” the supply mentioned.
PoS operators demand extra time, flexibility
The Affiliation of Cellular Cash and Bank Brokers in Nigeria (AMMBAN), which represents hundreds of PoS brokers nationwide, has additionally raised purple flags.
Nationwide Vice President of the affiliation, Mr. Yusuf Adeyemo, advised Nairametrics that the timeline for compliance was unrealistic given the dimensions of gadgets in circulation.
“Think about we’ve got over 7 to eight million energetic PoS terminals and we’re anticipated to geo-tag all of them inside 60 days. That isn’t sensible, particularly with challenges round tackle verification and community points,” Adeyemo mentioned.
He additionally criticised the 100-meter operational radius set by the CBN, arguing that it’s too restrictive.
“If a PoS agent in a motor park strikes inside 100 meters from the tagged location, the terminal will cease working. That isn’t practical. The regulator wants to extend that distance to permit flexibility,” he added.
- Adeyemo acknowledged that the coverage might assist scale back fraud, particularly by stopping criminals from shifting terminals to distant areas for illicit transactions.
- However he burdened that actual influence would solely come if the certification course of included brokers themselves, not simply their gadgets.
- In keeping with him, there’s a want for a nationwide register the place all brokers are verified, not simply the machines.
“Should you don’t certify the agent, fraudulent transactions will nonetheless slip by, even when the terminal is geo-tagged,” he mentioned.
Why CBN is pushing geo-tagging
The push for geo-tagging is a part of a broader regulatory reform of the Central Bank of Nigeria.
In August, the CBN issued a round mandating all gamers in Nigeria’s funds ecosystem, together with Deposit Cash Banks (DMBs), Microfinance Banks (MFBs), Cellular Cash Operators (MMOs), Tremendous Brokers, and switching firms to undertake the ISO 20022 messaging customary and geo-tag all cost terminals by October 31, 2025.
The apex bank mentioned the reforms would align Nigeria with SWIFT’s international migration timeline, enhance cost knowledge high quality, and improve oversight of digital transactions.
“All cost transaction messages exchanged domestically or internationally should be formatted in ISO 20022 according to CBN and SWIFT specs,” the round said.
- On geo-tagging particularly, the CBN mentioned all current and new PoS terminals should be geared up with native geolocation providers, supported by double-frequency GPS receivers, and tied to service provider areas with exact coordinates.
- Terminals not routed by a Cost Terminal Service Aggregator (PTSA) wouldn’t be permitted to function, whereas Android OS 10 was set because the minimal software program requirement.
“Geo-location knowledge should be captured on the level of transaction and included within the message payload as a compulsory reporting discipline,” the bank mentioned, including that validation workouts would begin from October 20.
Potential beneficial properties and trade-offs
From the regulator’s perspective, the advantages are clear: larger accountability, real-time visibility of transactions, diminished fraud, and enhanced customer belief.
NIBSS insists that geofencing capabilities and automatic alerts will assist authorities detect violations and stop unauthorized use of terminals.
However trade gamers argue that the trade-offs are heavy. Compliance prices similar to upgrading terminals, recertification charges, and software program updates will fall on fintechs and operators, lots of whom run on slim margins.
These prices might trickle all the way down to customers within the type of greater transaction prices. In busy markets, motor parks, and semi-formal retail areas the place brokers usually transfer round to serve clients, inflexible geo-fencing might imply repeated transaction failures, eroding customer belief in digital funds.
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