Reps to invite CBN, banks over unverified POS operators

The House of Representatives has resolved to invite the Central Bank of Nigeria’s Governor, Olayemi Cardoso, and the Chief Executive Officer of commercial banks to address the challenges posed by unverified Point of Sales (POS) operators.

The House resolution came after the member representing Ehime/Mbano/Uboma/Obowo Federal Constituency, Imo State, John Okafor, called for action against unverified POS during Wednesday’s plenary.

The Diaspora Digital Media (DDM), learnt that the lawmaker, while seeking support, emphasized the growing challenges associated with unidentified POS users in Nigeria.

Okafor noted that fraudulent activities have been established against POS users, stating the necessity to combat the practices and safeguard the integrity of financial transactions in Nigeria.

According to him, “the House is aware that undocumented POS transactions provide an opportunity for fraudulent activities, such as identity theft, money laundering, and unauthorized transactions.”

“By requiring users to provide identification, the occurrence of fraudulent activities will reduce, and the security of financial transactions in Nigeria will improve.”

“The House is aware that accurate documentation of POS operators and users promotes transparency and accountability.”

“By providing transparency, transactions can be tracked to specific individuals, promoting accountability for illegal activities.”

Criticizing the CBN, the Rep member, alleged the bank of bias in enforcing due process, which POS operators and users are supposed to follow.

The APC’s lawmaker demanded immediate intervention to prevent this situation and safeguard Nigerians from POS system-related crimes.

“Implementing a system to verify POS users’ and recipients’ identities supports financial regulatory requirements, both nationally and internationally, to prevent financial crimes and ensure AML/KYC compliance,” Okafor explained.

Following widespread support, Speaker Tajudeen Abbas mandated relevant House Committees to summon the CBN Governor and top banking executives to discuss POS regulation.

A four-week deadline was given to the committees to present their findings to the House.

POS operations in Nigeria

POS operations in Nigeria have revolutionized the way people access financial services, especially in rural areas where traditional banking services are scarce.

History

The Central Bank of Nigeria (CBN) formally introduced the POS system and Agency Banking model in 2012, which has since grown tremendously.

The CBN also issued guidelines for the regulation of agent banking and agent banking relationships in Nigeria in 2013.

How POS works in Nigeria

The operators act as agents of financial institutions, providing services such as cash withdrawals, deposits, fund transfers, bill payments, and airtime recharge.

To become an operator, one needs to acquire a terminal from a bank, Mobile Money Operator (MMO), or financial institution, and have a location that can generate human traffic.

Types of POS devices

There are different types of POS devices used in Nigeria, including traditional POS machines, mini POS (mPOS) devices, and Android POS devices.

The mPOS devices are smaller and more portable, while Android POS devices are more sophisticated and can perform all the functions of a traditional POS.

Benefits

POS operations have provided employment opportunities for many Nigerians and have given people access to financial services, especially in rural areas.

The POS system has also helped to facilitate the ease of doing business without carrying cash.

Regulation of POS Operations in Nigeria

The CBN regulates POS operations in Nigeria, and POS operators are required to comply with the CBN’s guidelines and regulations.

The CBN has also proposed revisions to the Regulatory Framework for Agency Banking in Nigeria.

Challenges

Despite the benefits of POS operations, there are still challenges facing the industry, including the need for infrastructure to support the growth of POS operations.

There is also a need for more awareness about the benefits of POS operations and how they can be used to access financial services.

Future

The future of POS operations in Nigeria looks promising, with the CBN’s commitment to promoting financial inclusion and the growth of the the industry.

As the economy and financial activities continue to expand across the country, there will be more opportunities for POS operators to provide financial services to underserved communities.

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