The Central Bank of Nigeria (CBN) has issued a sweeping directive compelling all financial institutions and payment operators in the country to complete migration to the ISO 20022 global messaging standard and implement mandatory geo-tagging of payment terminals by October 31, 2025.
In a circular dated August 25 and signed by Dr. Rakiya O. Yusuf, Director of the Payments System Supervision Department, the apex bank stressed that the reforms are crucial to strengthening Nigeria’s financial infrastructure, aligning the country with international benchmarks, and improving transparency in electronic transactions.
The directive, published on the CBN’s official website on Tuesday, applies to Deposit Money Banks (DMBs), Microfinance Banks (MFBs), Mobile Money Operators (MMOs), Switching and Processing Companies, Payment Terminal Service Providers (PTSPs), Payment Solution Service Providers (PSSPs), Super Agents, and all other licensed players in the payments ecosystem.
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ISO 20022: Global Standard, Local Mandate
The CBN said the adoption of ISO 20022, now the global benchmark for payments messaging, is consistent with SWIFT’s global migration timeline.
“All payment transaction messages exchanged domestically or internationally must be formatted in ISO 20022 in line with CBN and SWIFT specifications,” the circular stated.
Institutions are expected to populate mandatory data fields accurately, including payer and payee identifiers, merchant and agent identifiers, and transaction metadata. The regulator underscored that compliance is not optional, warning that migration activities must be fully completed before the October 31 deadline.
ISO 20022 replaces legacy messaging formats with a data-rich framework that provides greater clarity and reliability. Instead of terse transaction codes, the standard allows detailed information such as purpose codes, remittance details, and identifiers, thereby reducing errors, enhancing fraud detection, and making regulatory oversight more effective.
Mandatory Geo-Tagging of Terminals
In addition to messaging reforms, the CBN rolled out a significant requirement for geo-tagging of payment terminals such as PoS devices.
According to the directive:
- All existing and new terminals must have native geolocation services enabled, supported by double-frequency GPS receivers.
- Terminals must be registered with a Payment Terminal Service Aggregator (PTSA) and tied to precise latitude and longitude coordinates of the merchant’s physical business location.
- Android OS version 10 or higher is now the minimum requirement to ensure compatibility with the National Central Switch’s geolocation monitoring system.
- Terminals not routed through a PTSA will be barred from transacting.
- Geo-location data must be captured at the point of transaction and embedded in the message payload as a mandatory reporting field.
The apex bank further directed that all existing terminals must be geo-tagged within 60 days of the circular, while new terminals must be geo-tagged before certification and activation. Compliance validation exercises are set to commence from October 20, 2025.
The CBN aims to curb fraud, prevent unauthorized relocation of devices, and strengthen confidence in digital transactions by linking terminals to their exact deployment points. Geo-tagging also enables regulators to identify underserved regions and guide policies for financial inclusion.
Why It Matters
Experts say the reforms represent one of the most ambitious overhauls of Nigeria’s payments ecosystem in years. The ISO 20022 migration aligns the country with global financial standards, enhancing cross-border payment efficiency while tightening domestic oversight.
The mandatory geo-tagging of payment terminals is expected to reduce rampant fraud involving mobile PoS machines and strengthen transaction integrity. Analysts also point out that by tracking deployment, the CBN could use the data to address gaps in payment penetration across rural and semi-urban areas.
Challenges Ahead
Despite the clear benefits, the directive may pose challenges for smaller operators. Many microfinance banks and small PTSPs could struggle with the cost of upgrading devices to Android 10 and equipping them with advanced GPS technology.
Some analysts warn that without adequate support, smaller firms risk being forced out of the market. They note that while this reform will certainly improve the payments space, the cost implications may hit smaller players harder, potentially leading to consolidation in the industry.
Nigeria’s payment system has grown exponentially over the past decade, with PoS transactions, mobile money services, and online payments surging as cash use declines. But fraud, weak oversight, and uneven infrastructure deployment have plagued the sector.
The CBN’s reforms, by insisting on data standardization (ISO 20022) and location traceability (geo-tagging), aim to plug these gaps, protect consumers, and put Nigeria on par with advanced financial markets.
If fully implemented, the measures could reshape not just compliance but also competition in the industry, rewarding operators who can swiftly adapt and raising the bar for customer trust and transaction security.