Nigeria mandates 1.9 million PoS brokers to register with CAC to fight fraud

Nigeria’s 1.9 million PoS brokers, a key a part of the nation’s monetary inclusion drive, should now be registered with the Company Affairs Fee (CAC) as a part of plans to enhance transparency and scale back fraud. 

Earlier than this week’s directive, fintechs onboarded brokers by taking data like identify, bodily places and phone numbers, per the CBN regulatory framework for agency banking. Brokers had been supplied with point-of-sale gadgets to carry out transactions at a store or a delegated location. Fintechs like Moniepoint, OPay, and PalmPay dominate the contested agent banking enterprise. 

This week’s new rule comes as fraud incidents involving POS terminals are rising. POS terminals accounted for 26.37% of fraud incidents in 2023, in accordance with a fraud report by the Nigeria Inter-Bank Settlement System Plc (NIBSS). 

In January, TechCabal reported that the CBN was collaborating with the Affiliation of Cell Cash and Banking Brokers of Nigeria (AMMBAN) to create a brand new characteristic on PoS terminals to flag fraudulent transactions.

PoS brokers are ubiquitous due to the low barrier to entry and its reputation as a second revenue stream for small retailers. Eager competitors means fintech startups within the area give out the POS terminals for lower than the fee worth and maintain onboarding easy. 

The mandate to register these brokers as companies could make onboarding harder. 

Enterprise registration is a tedious course of which will require hiring a lawyer, growing the complexity of signing up new brokers. In February, Moniepoint partnered with CAC to assist digitise the operations of over 2 million small companies.

“We made obligatory integrations to make sure companies can apply for CAC registration within the app,” a Moniepoint spokesperson advised TechCabal.

The corporate’s rivals are more likely to ink comparable partnerships to remain aggressive and join brokers who’re a essential a part of their enterprise.  In February, PalmPay entered a partnership with CAC to register over 200,000 companies.