CBN Issues Tough New Rules for POS Operators and Agency Banking Providers

Abuja, Nigeria – The Central Bank of Nigeria (CBN) has rolled out sweeping new regulations for agency banking providers and Point of Sale (POS) operators, marking the most significant reform of the sector in recent years.

The move comes as agency banking, powered largely by POS operators, has become a lifeline for millions of Nigerians—particularly in rural and underserved areas—yet has also seen rising cases of fraud, cloned devices, and untraceable transactions.

According to the CBN, the fresh framework aims to mitigate risks, improve transaction traceability, and strengthen consumer protection in a sector that processes billions of naira in daily transactions.

The Five Key Rules

1. The 10-Metre Rule
POS terminals must now operate only within 10 metres of their registered business address. This ends the practice of roaming terminals in markets, bus stops, and remote shops. Transactions carried out outside the permitted zone risk being flagged or blocked. The CBN says the restriction will curb fraud by limiting the use of stolen or cloned devices.

2. Geo-Tagging of Devices
All POS devices must be geo-tagged to record GPS coordinates in real time. This ensures that every transaction is tied to a specific location, preventing “ghost terminals” from operating in illegal areas. New devices must be geo-tagged before activation, while existing devices must comply within 60 days.

3. ISO 20022 Messaging Standard
By October 31, 2025, all banks, processors, and POS systems must migrate to the ISO 20022 standard, which allows more structured data in transactions, improves fraud detection, and aligns Nigeria with international payment systems.

4. Licensed Routing and Certification
All transactions must be routed through a licensed Payment Terminal Service Aggregator (PTSA) such as NIBSS or Unified Payments Services. Terminals must also be certified by the National Central Switch (NCS) and equipped with approved geolocation tracking software.

5. Nationwide Compliance Inspections
Starting October 20, 2025, the CBN will begin field inspections to enforce compliance. Devices that fail checks—such as those without geo-tagging, operating outside approved locations, or running outdated Android systems—risk being disconnected immediately.

Big Picture

The CBN says the reforms are designed to bring discipline and transparency into agency banking while restoring trust in POS services.

For operators, however, compliance will require new investments in software upgrades, certified devices, and stricter controls on how and where terminals are deployed.

While small businesses may face challenges, regulators insist that the changes will ultimately make Nigeria’s payments system safer, more reliable, and better aligned with global standards.