…to counter increasing rate of fraud, regularise business
…3.7 million machines registered
Nigeria’s Corporate Affairs Commission (CAC) is pushing for enforcement, following the lapsing on September 4 (2024), of its directive that the country’s exponentially growing number of that Point of Sale (POS) operators should register with the commission.
To this end, the CAC says it is now working closely with law enforcement agencies and other relevant stakeholders to develop and implement a robust enforcement and sanctions framework for PoS operators flouting the directive.
According to the Nigerian Inter-Bank Settlement System (NIBSS) data, a total of 3.730 million PoS machines had been registered across the country as of March 2024, which shows that a total of 1.04 million terminals are either yet to be deployed or have become inactive.
There are also a worrisome number unregistered, the CAC says.
The total value of Point of sale (PoS) transactions for 2023 was N10. 73 trillion compared to N8. 39 trillion recorded in 2022 indicating a 27.85 per cent increase.
Despite the obvious ease of business and employment advantages that the PoS application brings to Nigeria, security sources say it is also fraught with troubling security challenges and cannot be left without strict regulation and monitoring.
Our sources say scammers use PoS channels to access confidential financial information of hapless Nigerians through which they gain access into the victims bank accounts and defraud them.
One way in which the scammers do this, it is said, is by claiming transaction failures on customers Automated Teller Machine (ATM) cards after debits have already been made, and asking for personal and security details, such as name, account number, phone number and Bank Verification Number (BVN) purportedly with a view to facilitating refunds.
The scammers then use these details to access the victims bank accounts and steal their money.
PoS fraudsters are also said to place plastic overlay over the ATM keypad to capture PINs as they are entered. An overlay placed over the card insertion slot records the data on the magnetic stripe. Tiny cameras placed on an ATM record keypad entries as the customer types.
Meanwhile, the CAC registration enforcement framework, will according to the body, target the shutdown of non-compliant PoS businesses and could also involve more severe legal actions against defaulters.
The Commission expressed concern over the low level of compliance by POS operators, despite the large number of such businesses operating across the country.
They also commended those operators who adhered to the directive, noting their responsible approach to formalising their operations.
“We are to make it clear that the Commission is working with Law Enforcement Agencies and other relevant stakeholders to deploy a comprehensive enforcement and sanction framework that may include not only possible shutdown but other severe legal Consequences,”
The Commission however criticised what it called “recalcitrant operators,” many of whom have either refused or failed to comply with the registration requirement.
The CAC suggested that some of these operators might be engaging in “unwholesome activities” or have other undisclosed reasons for resisting formalisation.
As the CAC moves towards enforcement, it urges all unregistered POS operators to take immediate steps to formalise their businesses or face the consequences of their inaction.
Recall that in May 2024 the CAC announced that PoS agents have been given a deadline of July 7, 2024, to register their business.
Hussaini Magaji, Registrar-General of the CAC, who announced this said this was the agreement with the PoS operators after a meeting in Abuja.
According to him, the registrations also align with the legal requirements and the directives of the Central Bank of Nigeria.
Magaji added that the action was equally backed by Section 863, Subsection 1 of the Companies and Allied Matters Act, CAMA 2020 as well as the 2013 CBN guidelines on agent banking.
Magaji said the registration is aimed at safeguarding the businesses of fintechs and customers, strengthen the economy and tackling the surge in fraud in Nigeria’s financial industry.
The Commission also announced an extension of the mandatory registration for Fintech Operators to September 5, 2024.
It said the 60-day extension is to give sufficient time to operators particularly those in remote areas who might have encountered network challenges to register and continue with their businesses.
