In response to the Corporate Affairs Commission’s (CAC) deadline of September 5, 2024, for Point of Sale (POS) operators to get registered, the Association of Mobile Money and Bank Agents in Nigeria (AMMBAN) has taken legal action by challenging the directive.
In accordance with legal requirements and directives from the Central Bank of Nigeria (CBN), the federal government had given point-of-sale (POS) companies two months to register themselves, their agents, merchants, and individuals with the Corporate Affairs Commission (CAC).
Why POS Operators Are Asked To Register
The CBN’s intentions to end trading in bitcoin and other virtual currencies, as well as the prevalence of fraud involving point-of-sale terminals, provided the context for this new rule.
The Nigeria Inter-Bank Settlement System (NIBSS) Plc reported that in 2023, 26.37% of fraud cases occurred at point-of-sale terminals. According to CAC, this change will reduce system fraud, kidnapping, and ransom payments.
The registration requirements imposed by CAC violated the provision of the Companies and Allied Matters Act, Laws of the Federation of Nigeria, 2004, according to Oluwasegun Elegbede, national general secretary of AMMBAN. This act explicitly states that the commission has no jurisdiction over individuals not operating as a company.
The decision to enforce the CAC directive on individuals acting as POS agents will be challenged on the grounds that it goes against the Companies and Allied Matters Act, Laws of the Federation of Nigeria, 2004. This act makes it clear that CAC does not have authority over individuals who are not acting as a company.
The case is currently before the court, and a hearing has been set for September. Elegbede elaborated by saying that if sub-agents (such bank branches) are required to register with CAC, the court will need to step in and interpret the cited portion of the CAMA.
Reaction TO CAC’s Move
In response to CAC’s concerns, Elegbede stated that combatting crime is not within CAC’s purview but that AMMBAN is working with law enforcement to reduce fraud in the industry.
Thanks to their unique BVN/NIN numbers, all point-of-sale operators may be tracked. Since no operator may use a point-of-sale system secretly, NIBSS can track them. Their SIM cards can be used to track them.
Additionally, they can be traced back to the issuing bank or corporation of the point-of-sale system. As a result, he said, operators have nowhere to go if they go into default.
The Gap POS Fills
Mobile money agents are pushing financial inclusion across Nigeria, especially in rural areas where traditional banking services are rare, according to the national general secretary.
Concerning the effect on members, he stated that the registration fee for CAC was at least N35,000 and that some did not even have that much money on hand. He implies that these are young individuals who are attempting to support themselves. The imposition of a fine of N35,000 on them has the ability to severely limit the activities of several small-scale agents nationwide.
He agreed that regulation is necessary but stressed that it must not hinder the sector’s expansion or put an unfair burden on small company owners. According to him, they have full faith that the court would find their case meritorious.
A large number of operators, meantime, have been following the order. This is happening despite the fact that the PoS Operators Association has stated that they are still waiting for the court case’s decision.
According to the findings, many point-of-sale operators had registered with CAC, as several financial service providers had made the registration process easier.
One point-of-sale operator, Akeem, who operates a terminal supplied by Opay, reported successfully registering with the bank. He detailed how, for N19,000, he had registered online with the assistance of local coordinators dispatched by Opay.
Similarly, point-of-sale operators utilising Moniepoint terminals were required to follow certain protocols.
Because her business name was not registered with the CAC, Kemisola’s financial services provider prohibited it. She is a chicken products retailer in Lagos. But she keeps logging into her personal account through the terminal.
Currently, she is using her personal account, which she disclosed. After last year’s cash shortage caused problems for merchants, she decided to get a point-of-sale system to help clients pay without using cash. Unfortunately, she is still billed for this point-of-sale system, and her customers aren’t happy about it.
Additionally, she mentioned that in the event that one of her personal accounts is blocked, she will return to collecting cash exclusively, as the reliability of transfers is questionable. After the transfer is complete, there is a false alarm, and the money may go backwards.
Due to an easier registration process developed by certain financial service providers, a large number of point-of-sale operators have registered with the CAC.
Akeem, a point-of-sale operator who makes use of an Opay terminal, claimed to have registered with the help of the financial services provider.
He detailed how, with the assistance of OPAY’s sent-out area coordinators, he had paid N19,000 to register online. Similarly, point-of-sale operators utilising Moniepoint terminals were required to follow certain protocols.
