IMPLICATIONS OF CBN NEW POLICY ON GEO-FENCING ON POS OPERATORS

The Central Bank of Nigeria (CBN) has introduced a geofencing policy for Point of Sale (PoS) terminals to enhance oversight and curb fraud in the electronic payments system. The key elements of this initiative include:

Geo-tagging Requirement: All PoS terminals must be geo-tagged, restricting their use to a 10-meter radius from the registered business or service location. This limits terminal mobility, ensuring transactions occur only at designated sites.

Purpose: The policy aims to eliminate "cloned" or "ghost" terminals, reduce fraudulent activities (such as those linked to ransom payments), and enhance transaction integrity. It also supports Nigeria’s cashless policy and aligns the payment system with international standards.

Technical Specifications: Terminals must run Android OS version 10 or higher and integrate the National Central Switch’s Software Development Kit (SDK) for geolocation monitoring. Geo-location data must be captured at the start of each transaction and included in the message payload as a mandatory field.

Compliance Timeline: Existing terminals must be geo-tagged within 60 days, and new terminals must be geo-tagged before certification and activation. Compliance validation began on October 20, 2025, with a deadline of October 31, 2025.

Impact: The geofencing rule may increase costs for operators like Moniepoint, Opay, and banks, requiring GPS-enabled devices or software upgrades. It could particularly affect smaller or mobile operators, such as those in transportation or logistics, who rely on flexible terminal locations.

This policy aligns with the CBN’s adoption of the ISO 20022 standard for payment messaging, aiming to standardize transaction data and meet global best practices.

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