Nigeria’s 1.9 million PoS agents, a key part of the country’s financial inclusion drive, must now be registered with the Corporate Affairs Commission (CAC) as part of plans to improve transparency and reduce fraud.
Before this week’s directive, these fintechs onboarded agents by taking information like name, physical locations and telephone numbers, per the CBN regulatory framework for agency banking. Agents were provided with point-of-sale devices to perform transactions at a shop or a designated location. Fintechs like Moniepoint, OPay, and PalmPay dominate the contested agent banking business.
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, according to a fraud report by the Nigeria Inter-Bank Settlement System Plc (NIBSS).
In January, TechCabal reported that the CBN was collaborating with the Association of Mobile Money and Banking Agents of Nigeria (AMMBAN) to create a new feature on PoS terminals to flag fraudulent transactions.
PoS agents are ubiquitous because of the low barrier to entry and its popularity as a second income stream for small retailers. Keen competition means fintech startups in the space give out the POS terminals for less than the cost price and keep onboarding simple.
The mandate to register those agents as businesses may make onboarding more difficult.
Business registration is a tedious process that may require hiring a lawyer, increasing the complexity of signing up new agents. In February, Moniepoint partnered with CAC to help digitise the operations of over 2 million small businesses.
“We made necessary integrations to ensure businesses can apply for CAC registration in the app,” a Moniepoint spokesperson told TechCabal.
The company’s competitors are likely to ink similar partnerships to stay competitive and sign up agents who are a critical part of their business. In February, PalmPay entered a partnership with CAC to register over 200,000 businesses.
