Crunch time for PoS operators as CBN mandates CAC registration by July 7

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The Central Bank of Nigeria (CBN) has issued a directive to Point-of-Sale (PoS) operators across the country, mandating their registration with the Corporate Affairs Commission (CAC) by July 7th, 2024. This move, announced during a meeting with Fintech representatives, aims to strengthen the financial system and protect consumers.

This was revealed during a meeting between Fintechs and the Registrar-General/Chief Executive Officer (CAC) Hussaini Magaji (SAN) in Abuja on Tuesday.

Speaking at the event, the CAC boss said the two-month timeline to register their agents, merchants, and individuals with the commission, was “in line with legal requirements and the directives of the Central Bank of Nigeria”.

“The measure aims at safeguarding the businesses of Fintech’s customers and strengthening the economy,” a statement titled ‘CAC, PoS OPERATORS AGREE TO TWO-MONTH DEADLINE TO REGISTER THEIR AGENTS AND MERCHANTS TO STRENGTHEN THE FINTECH INDUSTRY‘ issued by the CAC added.

He stressed that the action was equally backed by Section 863, Subsection 1 of the Companies and Allied Matters Act, CAMA 2020, and the 2013 CBN guidelines on agent banking.

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Magaji explained that the timeline for the registration which will expire on July 7, 2024, was not targeted at any groups or individuals but aimed at protecting businesses.

The urgency surrounding the deadline has raised concerns among PoS operators, particularly regarding the feasibility of completing the registration process within the allotted timeframe. The sheer number of PoS operators – estimated to be around 1.9 million nationwide – presents a logistical challenge for both operators and the CAC.

Unpacking the Rationale

The CBN’s reasoning behind the directive centers on two key objectives:

• Enhanced Transparency: Registering PoS businesses with the CAC brings them under the legal purview of the Companies and Allied Matters Act (CAMA) 2020. This fosters transparency by establishing a clear legal identity for these entities, allowing authorities to better monitor their activities and ensure compliance with regulations.
• Consumer Protection: A formal registration process strengthens consumer protection mechanisms. Should any disputes arise between a customer and a PoS operator, a registered business offers a clearer path for recourse and resolution. Additionally, the CBN’s 2013 guidelines on agent banking are cited as a source for this directive, suggesting the aim might also be to standardize PoS operations and ensure adherence to best practices.

Industry Response and Potential Challenges

While some industry players acknowledge the benefits of increased regulation, concerns remain. The tight deadline, coupled with the potentially high volume of registrations, could overwhelm the CAC’s processing capacity. Additionally, smaller PoS operators, particularly those in rural areas with limited access to resources and support, might face difficulties navigating the registration process.

Collaboration for a Smooth Transition

The success of this initiative hinges on effective collaboration between the CBN, CAC, and the Fintech industry. Streamlining the registration process, providing clear and accessible guidelines, and offering support to smaller PoS operators will be crucial. Open communication channels to address any challenges faced during the registration period are also essential.