Because the January 1, 2026, registration deadline lapses, Nigerians say it should take a look at the state’s capability to formalise the Level of Sale ecosystem with out weakening the monetary inclusion it created, writes Festus Akanbi
At 6:47 a.m. on a moist Tuesday in Olambe, a border group between Ogun and Lagos states, David Ojeme steadies a small point-of-sale (POS) terminal on a makeshift counter, a picket plank balanced between two crates of telephone equipment. A girl beside him waits impatiently to withdraw N20,000, glancing repeatedly at her wristwatch. Taped to the wall behind Ojeme is a pale certificates bearing the identify Topeline Enterprise, which he claimed was registered with the Company Affairs Fee (CAC) in 2021. For Ojeme, that doc represents legitimacy. For regulators, it’s now not sufficient.
“I have already got a enterprise identify,” he says, tapping the certificates with quiet irritation. “Why ought to I pay once more simply so as to add ‘POS’ to it?”
New Order
That query, echoed in markets, motor parks, and avenue corners throughout Nigeria, sits on the coronary heart of a fast-developing regulatory confrontation. As of January 1, 2026, the CAC, backed by the Central Financial institution of Nigeria (CBN) and safety businesses, mentioned that each one POS operators should register company banking as a definite enterprise exercise underneath the Firms and Allied Issues Act (CAMA) 2020 and the CBN’s Agent Banking Rules. Unregistered terminals, the fee has warned, shall be seized. Fintech companions that proceed to allow them threat sanctions and doable blocklisting.
The directive marks essentially the most decisive try but to impose order on a sector that has grown explosively, and largely informally, over the previous 5 years. What started as a stopgap to deal with Nigeria’s persistent money distribution gaps has advanced right into a parallel monetary infrastructure that processes trillions of naira yearly and touches the each day lives of thousands and thousands.
The CAC’s place is unambiguous. In a public discover issued a fortnight in the past, the fee said that, efficient January 1, no POS operator can be permitted to function with out correct registration, including that safety businesses had been directed to implement compliance nationwide.
Registrar-Common Hussaini Magaji has framed the transfer as a crucial response to mounting systemic dangers fairly than an assault on small-scale entrepreneurs.
Funneling Ransom Fee
Based on the fee’s figures, 38,000 confirmed fraud circumstances in 2024 have been linked to POS terminals, with estimated losses of N52.26 billion. Investigations, Magaji mentioned, revealed that unregistered or poorly vetted gadgets have been more and more getting used to facilitate ransom funds, cash laundering, and cyber-enabled monetary crimes. In his view, the absence of a verifiable company id makes enforcement and accountability nearly unimaginable as soon as a terminal is implicated in wrongdoing.
These issues have additionally surfaced within the Nationwide Meeting. At current parliamentary hearings, the Chairman of the Home Advert-hoc Committee on Cryptocurrency and POS Operations, Hon. Olufemi Bamisile, disclosed that in some states as a lot as 40 per cent of kidnap ransom funds now move via casual POS channels.
Whereas Magaji pressured that lawmakers weren’t searching for to criminalise operators, he argued that permitting thousands and thousands of flippantly regulated money factors to perform exterior efficient oversight amounted to tolerating a shadow banking system.
But on the streets, among the many brokers who type the spine of this ecosystem, the directive is considered via a really completely different lens. For a lot of, the POS terminal is just not a enterprise in itself however an add-on to an current commerce, frozen meals, telephone repairs, provisions, tailoring, deployed to draw foot site visitors and earn marginal commissions. The concept it ought to require a separate registration feels arbitrary to them.
Double Registration?
In Ikorodu, Olusola Folowo operates a small frozen-food outlet. Relating to her CAC registration, she insists it already permits ancillary companies.
“The revenue margin on POS transactions is tiny,” she explains. “On a N10,000 withdrawal, I’d earn N200 after costs. From that, I nonetheless pay lease, generator gas, and knowledge prices. They now need an extra N25,000 for registration. How does that make sense?”
This notion is widespread. An evaluation by THISDAY signifies that roughly 68 per cent of POS operators run a number of actions underneath a single registration, seeing the terminal as a cost instrument fairly than a standalone enterprise.
The Nationwide President of the Affiliation of Digital Fee and POS Operators, Paul Okafor, has repeatedly drawn analogies to different instruments of commerce.
“The POS is only a machine,” he argues. “A tailor doesn’t register his stitching machine individually. Why ought to an agent register a terminal individually?”
Behind the rhetoric lies a stark numerical actuality. Information from the Nigeria Inter-Financial institution Settlement System (NIBSS) exhibits that POS transaction values surged by 69 per cent in 2024 to N18 trillion, whereas the variety of terminals greater than doubled from about 2.4 million to five.5 million. Of those, solely round 3.5 million operators have accomplished CAC registration in step with present necessities, leaving an estimated compliance hole of two million gadgets.
Structural Deficiences
The expansion has been pushed by structural deficiencies in Nigeria’s formal banking infrastructure. With simply over 21,500 ATMs serving an estimated 63 million financial institution prospects, POS brokers have turn into de facto human ATMs, particularly in peri-urban and rural communities the place the closest financial institution department could also be dozens of kilometres away. Through the naira redesign and money shortage disaster, these brokers turned indispensable, holding commerce alive when formal channels seized up.
Even throughout the regulatory institution, there’s an acknowledgement of this position. A senior CBN official, talking on situation of anonymity, conceded that POS operators “saved the system” throughout that interval. The identical official, nonetheless, insisted that the size the sector has now reached makes tighter controls unavoidable. Monetary inclusion, he mentioned, can’t be pursued on the expense of monetary integrity.
Fintech Firms to the Rescue
Caught squarely in the midst of this standoff are the fintech corporations that energy the terminals. OPay, Palmpay, and Moniepoint collectively management roughly 72 per cent of the market, counting on thousands and thousands of impartial brokers for last-mile distribution.
Over the previous 12 months, these corporations have launched compliance drives, providing free or subsidised CAC registration, police clearance vouchers, and airtime incentives to regularise their agent networks. Progress has been uneven.
A senior govt at a fintech firm describes the scenario as a traditional prisoner’s dilemma. Disconnecting unregistered brokers would trigger corporations to lose market share to opponents that reply quicker. Failing to take action, nonetheless, exposes platforms to regulatory sanctions.
The CAC has already hinted at graduated penalties for enabling platforms, starting with public warnings and escalating to fines, service restrictions, and, in excessive circumstances, licence suspension. Business sources estimate that as many as 1.8 million terminals at the moment function via fintech partnerships with out full compliance.
Worldwide expertise affords each reassurance and warning. India’s 2018 mandate requiring police verification and formal registration for all banking correspondents led to a reported 60 per cent discount in agent-related fraud, in keeping with Reserve Financial institution of India knowledge. Kenya’s 2021 Digital Credit score Suppliers Rules equally tightened oversight of cell cash brokers, although not with out price. In that case, an estimated 200,000 micro-agents exited the market, citing compliance bills and administrative complexity.
For monetary inclusion specialists, these examples underscore the fragile steadiness regulators should strike. Dr. Okey Nwankwo, a advisor within the area, notes that formalisation nearly all the time carries short-term ache. The vital query, he argues, is whether or not Nigeria can implement its framework with out pushing a big share of brokers again into informality or triggering service gaps in underserved areas, as occurred in elements of India the place compliance prices proved prohibitive.
January 1 has handed, and the contours of the doable outcomes are coming into focus. One state of affairs envisages mass compliance, pushed by intensified fintech incentives, streamlined CAC processes, and cell registration items reaching markets and rural hubs. One other anticipates selective enforcement, with authorities specializing in high-volume or high-risk brokers whereas extending grace intervals for smaller operators in distant communities. A 3rd, extra disruptive risk would see widespread seizures and disconnections, doubtlessly triggering money shortages, larger transaction charges, and public backlash in opposition to each regulators and platforms.
What is obvious is that the POS sector, as soon as seen as a stopgap innovation, now sits on the centre of Nigeria’s monetary system and its vulnerabilities. The deadline will exhibit regulatory capability, trade coordination, and the state’s capability to formalise a grassroots financial phenomenon with out undermining the very inclusion it helped create.
