Following Tuesday’s Central Financial institution directive limiting money disbursement, Level of Sale (POS) banking brokers throughout Lagos are exploring methods to deal with the adjustments—primarily, by elevating withdrawal charges.
On Tuesday, the CBN set a each day restrict of ₦1.2 million per POS agent and capped withdrawals at ₦100,000 per buyer. That is the most recent try to rein in POS brokers, who’ve change into a vital supply of money since a CBN-engineered money shortage in 2023. The brand new guidelines threaten to upend the agent banking enterprise mannequin.
“The choice took us unexpectedly,” says Semiu Ajayi, a POS agent in Gbagada, Lagos. “I’ll simply enhance my withdrawal prices. It was ₦4,000 for a ₦100,000 withdrawal however now I’ll cost ₦6,000 or extra.” Ajayi’s response suggests POS operators will cross on the price of diminished enterprise to prospects.
POS brokers throughout Nigeria face related challenges. Essential gamers in Nigeria’s monetary inclusion drive, POS brokers have seen elevated patronage as Nigerians struggled to entry money from conventional banking channels reminiscent of ATMs and over-the-counter providers.
The surge in demand for money through these brokers is linked to a failed foreign money redesign in 2023 which triggered a chronic scarcity of bodily money. POS brokers, who usually supply money from casual channels like supermarkets and gasoline stations, have change into important intermediaries within the money distribution course of.
Nevertheless, critics accuse the brokers of charging excessive charges whereas others declare brokers foster a reliance on money, undermining the CBN’s aim of a cashless economic system.
The CBN’s new directives—which can put 2 million brokers below strain—seem geared at limiting the affect of those brokers. Whereas the CBN’s supporters will argue that the brand new coverage will curb fraud and promote a cashless economic system, many brokers consider it is going to decelerate buyer patronage.
“How will we survive with this new CBN coverage?,” asks Shade Raheem, a POS agent in Ikeja. “They simply need to push prospects to the banks.”
Many POS operators consider they’ll adapt and innovate across the new guidelines.
“We plan to accumulate extra terminals to handle the elevated demand, says Tade Oluwanisola, a POS agent in Ikorodu. “Not each buyer will withdraw as much as their limits each day, so we are going to unfold the demand throughout a number of terminals.”
The CBN claims the brand new withdrawal limits will tackle challenges, together with fraud prevention, uniform operational requirements, and regulation of the company banking sector.” The rising reliance on POS brokers has sparked requires stricter oversight, prompting a mandate for POS operators to register with the Company Affairs Fee (CAC) by September 2024.
“The CBN will conduct oversight of the aforementioned actions, together with impromptu backend checks, to make sure compliance,” the regulator acknowledged in its December 17 round. “Any breach of those directives will appeal to acceptable penalties, together with financial fines and administrative sanctions.”