The Corporate Affairs Commission (CAC) has threatened to blacklist fintech companies enabling unregistered Point of Sale (PoS) operations in Nigeria.
This was disclosed in a statement issued by the Commission’s management on Saturday.
The development comes nearly a year after the CAC commenced the process of taking drastic actions, including shutting down PoS businesses that failed to register before its September 5 deadline, which had already lapsed at the time.
What the Commission is saying
The CAC stated that it has observed a rising number of PoS operators allegedly running without registration, in violation of CAMA 2020 and CBN agent banking regulations.
Nairametrics reports that this is not the first time the Commission has raised such concerns.
According to the CAC, “This reckless practice, often enabled by some fintech companies, puts Nigeria’s financial system and citizens’ investments at risk.”
The Commission warned that the practice must stop effective January 1, 2026, adding that no PoS operator will be allowed to operate without CAC registration.
Additionally, it stressed that security agencies will be engaged to enforce compliance nationwide.
“Unregistered PoS terminals will be seized or shut down by security officials.
“Fintechs enabling illegal operations will be placed on a watchlist and reported to the CBN,” the statement added.
The CAC advised all operators to regularise their registration immediately, stating that compliance is mandatory.
Backstory
In May last year, the CAC announced that PoS agents of major fintechs in Nigeria, including OPay, Palmpay, and Moniepoint, among others, had been given a deadline of July 7, 2024, to register their businesses.
The Registrar-General of the CAC, Hussaini Magaji, who made the announcement, said this was part of an agreement reached with PoS operators after a meeting in Abuja. According to him, the registration requirement is also in line with legal provisions and directives of the Central Bank of Nigeria (CBN).
The Commission later extended the deadline by 60 days to September 5, 2024. The extension came with a warning that any operator who failed to meet the new deadline would face prosecution and risk losing their business.
Meanwhile, AMMBAN insisted that the registration requirements imposed by the CAC violate the provisions of the Companies and Allied Matters Act (CAMA), Laws of the Federation of Nigeria 2004, which “explicitly states that the Commission has no jurisdiction over individuals not operating as a company.”
According to AMMBAN’s National General Secretary, Oluwasegun Elegbede, the matter is already in court, which has scheduled hearing for September.
“The court will have to interpret the quoted section of CAMA to determine whether individuals operating as sub-agents—likened to bank branches—must register with the CAC,” Elegbede had added.
What you should know
The directive on the registration of PoS businesses came against the backdrop of frequent fraud incidents involving PoS terminals and the CBN’s efforts to curb trading in cryptocurrency or other virtual currencies.
According to a report by the Nigeria Inter-Bank Settlement System (NIBSS) Plc, PoS terminals accounted for 26.37% of fraud incidents in 2023.
Meanwhile, the Registrar-General of the CAC, Hussaini Magaji, has reiterated that the registration requirement is backed by Section 863(1) of the Companies and Allied Matters Act (CAMA) 2020, as well as the 2013 CBN guidelines on agent banking.
He said the registration aims to safeguard the businesses of fintechs and their customers, and to strengthen the economy.
