Nigerian PoS Operators Respond Amid Soaring Fraud Cases and CBN Crackdown
- PoS operators in Nigeria have denied widespread involvement in financial fraud, following a sharp rise in PoS-related scams and new CBN regulations
- Recent data shows PoS fraud cases jumped by over 31% in early 2024, making it the leading source of financial fraud in the country
- While operators admitted that some individuals might misuse the system, most said they are just trying to earn a living and called on the CBN for better awareness
Legit.ng journalist Victor Enengedi has over a decade's experience covering Energy, MSMEs, Technology, Banking and the Economy.
Point of Sale (PoS) operators across Nigeria have responded to claims that some of them are involved in illegal financial activities.
Their reactions follow the Central Bank of Nigeria's (CBN) announcement of a new policy requiring all payment system participants to adopt the ISO 20022 messaging standard and geo-tag their payment devices by October 31, 2025.
Source: UGC
CBN reports showed that the value of PoS transactions more than doubled, from N110.35 trillion in 2023 to over N223 trillion in 2024.
This growth is attributed to a shift away from ATMs and the rise of agency banking. However, with this growth, fraud cases involving PoS also increased.
According to data from the Financial Institutions Training Centre (FITC), PoS fraud went up by 31.12% in the first quarter of 2024, with 3,518 cases recorded, compared to 2,683 in the last quarter of 2023.
PoS fraud accounted for over 30% of all fraud cases in the financial system during that time, making it the most common type of fraud in Nigeria.
Some of the fraud complaints had forced the CBN to mandate PoS operators to immediately take steps to register their businesses with the Corporate Affairs Commission (CAC) in line with Section 863 of the Companies and Allied Matters Act (CAMA) 2020.
In turn, the CAC announced a September 5, 2024, deadline for PoS agents, super agents, and sole agents to register their businesses or face the risk of losing their accounts.
CBN operators deny fraud allegations
Abu Muhktar, a PoS operator in Abuja, told Daily Trust that most PoS agents are simply trying to earn a living.
He admitted that while it’s possible some operators may be involved in fraud, many like him are not.
He said:
“I have heard many times that all these big big people use PoS to pass money they stole and all but me they have not used mine before and I won’t allow it.”
He also mentioned he didn’t understand the new geo-tagging requirement and asked the CBN to educate them better.
Another operator, Chioma Eze, said she believes some PoS agents might be involved in fraud, but that she and her friends are not.
She added that many people wrongly accuse PoS agents of hoarding cash, not knowing that they often buy it from places like fuel stations, not directly from banks.
Like Muhktar, she also wasn’t sure what geo-tagging means, but said they would comply if it affects their business.
Moses Edeh, another agent, noted that the business is becoming less profitable as more people go cashless.
He said some may be using PoS for shady transactions due to the decline in regular business, but he personally stays out of trouble. He was also unaware of the CBN’s deadline and called for more awareness.
One anonymous agent told Daily Trust that while the business has opened opportunities, it has also made it easy for some to transfer large amounts of suspicious money without being caught, until security agencies eventually step in.
Source: Getty Images
Fraud is a challenge to PoS business
The president of the Kwara state chapter of the Association of Professional PoS Agents (KAPPSA), Mr. Ridwan Opakunle, confirmed that fraud is a serious problem in the PoS industry.
He said registered members of their group are traceable and unlikely to commit fraud, but unregistered operators are the main issue. Some even tamper with PoS machines to steal card information from customers, he added.
Another operator, Fidelix Dickson, said it’s hard to know exactly what others are doing, but the banks seem comfortable with PoS agents handling cash for them. He noted that people now avoid ATMs, relying more on PoS services instead.
Police to crack down on illegal PoS operators
Meanwhile, Legit.ng earlier reported that the federal government has pledged that security agencies will take action against PoS operators who do not comply with the directive to register with the CAC.
PoS operators in Nigeria who fail to register with CAC at the expiration of the deadline would be tagged as illegal.
As a result of their failure to register their operations, security operatives would escalate actions against them.
Proofreading by Funmilayo Aremu, copy editor at Legit.ng.
Source: Legit.ng
