CBN restricts daily limit of POS transactions to N100,000
The Central Bank of Nigeria has implemented a policy to advance its cashless economy initiative, limiting daily cash-out transactions conducted by Point of Sale agents to N100,000 per customer.Oladimeji Yisa Taiwo signed this directive on December 17, 2024, on behalf of the Director of the Payments System Management Department.
The new measures aim to increase electronic payment adoption, streamline agency banking operations, and reduce fraudulent activity. The CBN aims to address long-standing challenges in Nigeria's financial ecosystem by ensuring uniform operational standards and improved monitoring in agent banking.
The CBN's directive outlined a series of measures that principals of agent banking operations must implement immediately. The new regulations include the enforcement of daily and weekly cash withdrawal limits. Individual customers can now withdraw a maximum of N100,000 per day and N500,000 per week.
The daily cash-out transaction limit for POS agents is N1,200,000, ensuring that agency banking operations remain manageable. These caps are intended to encourage the use of electronic payment systems while lowering the risks associated with large cash transactions.
To maintain professional standards, POS agents must clearly separate their banking services from merchant activities. All transactions must use the Agent Code 6010 to identify and distinguish agency banking activities.
Furthermore, agents must conduct all operations exclusively through float accounts held by their primary financial institutions, ensuring centralised control and transparency in transaction processing.
The updated guidelines place an emphasis on strong monitoring mechanisms to prevent unauthorised activities. The accounts of POS agents, linked to their Bank Verification Numbers, will be scrutinised to detect irregularities, particularly transactions conducted outside of approved float accounts.
Real-time reporting is required for all transactions, which must be routed through terminals connected to the Nigerian Inter-Bank Settlement System and monitored by the Payments Terminal Service Aggregator. These measures are intended to improve compliance, reduce fraud risks, and maintain the integrity of the financial system.
To ensure compliance, the CBN has stressed the importance of oversight. Principals of agent banking operations will be held accountable for any lapses, and the apex bank plans periodic backend configuration checks. Violations of the directives will attract severe penalties, including monetary fines and administrative sanctions.
This intervention reflects the CBN’s commitment to fostering a secure, transparent, and efficient agent banking ecosystem, while also addressing concerns about fraud in the sector.
While the policy aims to strengthen Nigeria’s financial system, it may present challenges for stakeholders.
POS operators who rely on high-volume transactions could face reduced profitability, while customers, particularly in rural areas with limited bank access, may find the cash withdrawal restrictions inconvenient. These issues are particularly pronounced during the festive season, when cash demands typically surge.
The introduction of these measures underscores the CBN’s broader efforts to encourage the use of electronic payment channels and reduce Nigeria’s reliance on cash.
Stakeholders have been urged to comply with the guidelines and support the realization of the CBN’s vision for a cashless Nigeria. While the road to implementation may present obstacles, the long-term benefits of a secure and efficient banking framework promise significant gains for the country’s economy.
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