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Anti-fraud Law by FG requires POS Agents to register businesses with CAC

There are over 1.9 million POS Agents in Nigeria. This Agency banking is a key part financial inclusion drive in the country.
POS Terminal

The Nigeria's Government has released a new law that mandates all POS agents in Nigeria to register their businesses with the Corporate Affair Commission (CAC). This move is part of the government's plans to enhancing transparency and curbing fraud.

The latest directive/law comes in response to a fraud report from the Nigeria Inter-Bank Settlement System Plc (NIBSS), which uncovered that POS terminals contributed to 26.37% of fraud cases in 2023, signaling a concerning uptick in fraudulent activities associated with these terminals.

In 2013, the Central Bank of Nigeria (CBN) introduced agent banking and point-of-sale systems to improve financial inclusion across the country. POS agents were tasked with providing banking services to people in remote areas where traditional banks couldn't set up branches fast enough to keep up with the growing population.

By 2022, the initiative had expanded to include over 1.8 million POS agents, generating hundreds of thousands of jobs and fostering the growth of fintech companies like Opay, Moniepoint, and Palmpay. While celebrated for its success, the initiative has faced challenges, notably an increase in fraud incidents.

On March 9, 2024, the CBN issued a circular to banks, financial institutions, and payment service providers to regulate agent banking and safeguard customers' funds. Earlier reports indicated that the CBN, through the Nigerian Electronic Fraud Forum (NeFF), in collaboration with the Association of Mobile Money and Banking Agents of Nigeria (AMMBAN), would introduce a new feature on POS terminals to detect fraudulent transactions.

Despite the popularity of starting a POS business in Nigeria as an extra source of income, totaling at least 1.9 million agents, the new requirement to register as a business may complicate the previously straightforward onboarding process.

Prior to the latest directive issued this week, fintech companies utilized a process for agent onboarding that involved gathering essential details such as names, physical addresses, and contact numbers, in accordance with the regulatory guidelines set forth by the Central Bank of Nigeria (CBN) for agency banking operations.

These agents were then equipped with point-of-sale devices, enabling them to facilitate transactions either at a dedicated store or a predetermined location. Among the frontrunners in this competitive landscape of agent banking are prominent fintech players such as Moniepoint, OPay, and PalmPay, which have established significant dominance in the sector.

However, the recent directive has prompted a shift in the procedures governing fintechs' engagement with agents, marking a departure from the previous norms. Whereas before, the emphasis was primarily on gathering basic information for onboarding, the new directive/law is poised to introduce potentially transformative changes in how fintech companies approach agent recruitment and operations.

POS agents are now to register their businesses with the CAC. Meanwhile, requiring POS agents to register as businesses could potentially complicate the onboarding process; precisely, making it difficult.

In addition, registering a business can be a long and complicated job, sometimes needing a lawyer. In February, Moniepoint teamed up with CAC to help over 2 million small businesses do things digitally. Other companies will probably do similar things to keep up with Moniepoint. PalmPay, for example, joined with CAC to register over 200,000 businesses in February too.

Many POS agents are everywhere because it's easy to start and many small shop owners like having it as an extra way to make money. Fintech startups in this area compete a lot, so they give out POS machines for less money than they cost and keep the process of signing up simple.

This development signifies a dynamic evolution within the fintech sector, with implications for both industry players and consumers alike as they navigate the evolving landscape of digital financial services.

POS registration with CAC [Explained]

Here are simplified instructions for registering your POS business with CAC using different methods:

1. Do-it-yourself approach via CAC Website:

  • Go to the CAC website and create an account.
  • Check if your desired business name is available and reserve it.
  • Complete your registration online, providing necessary details and documents.
  • Pay the registration fee and submit your application electronically.
  • Receive your Certificate of Registration via email within a few days.

2. Online business registration platforms like Norebase:

  • Choose a platform like Norebase and search for your business name's availability.
  • Follow the prompts to fill out an online form and upload required documents.
  • Pay the fees and wait for notification of the Certificate of Incorporation, usually within three to five days.

3. Fintech apps with incorporation APIs (e.g., Moniepoint, Kuda, Sterling Bank):

  • Use the business banking app associated with your fintech PoS terminal.
  • Navigate to the business registration section and follow the provided steps.
  • Pay the registration fee through the app and await confirmation of incorporation.

4. Hands-off approach:

  • Engage a CAC-accredited registration agent or lawyer for professional assistance.
  • Alternatively, utilize business incorporation services offered by organizations like for a fee.

In conclusion, registering your POS business with CAC can be done through various methods, each offering its own level of convenience and assistance.

Whether opting for a DIY approach via the CAC website, utilizing online registration platforms, integrating with fintech apps, or seeking professional help, you have options to suit their preferences and budget.

Ultimately, the choice depends on the your comfort with the registration process and your desire for assistance.

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About the Author

With five years experience in Media, Temmy Samuel's become a modern journalist, delivering impressive reporting about tech, finance, business and science around the world. More About Temmy

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