The Central Bank of Nigeria (CBN) has issued a new directive requiring all financial institutions and licensed payment operators to comply with international payment messaging standards and introduce mandatory geo-tagging for Point-of-Sale (PoS) terminals.
According to the circular signed by Dr. Rakiya O. Yusuf, Director of the Payments System Supervision Department, the move aligns Nigeria’s payment infrastructure with global best practices while strengthening transparency and security across the financial system.
The CBN emphasized that all payment transaction messages, whether domestic or international, must adopt the ISO 20022 format in accordance with both its own and SWIFT’s global specifications. This standard requires the accurate inclusion of key data such as payer and payee identifiers, merchant and agent details, and transaction metadata.
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All institutions in the payment ecosystem, including Deposit Money Banks, Microfinance Banks, Mobile Money Operators, and Switching Companies, are expected to complete migration and achieve full compliance by October 31, 2025.
Mandatory Geo-Tagging of Terminals
In addition, the CBN directed that all existing and newly deployed PoS terminals must come with native geolocation capabilities, specifically Double-Frequency GPS receivers, to ensure reliable location tracking. Operators must register terminals with a Payment Terminal Service Aggregator (PTSA) and capture precise latitude and longitude coordinates for every merchant or agent location.
The circular further states that PoS applications must integrate the National Central Switch Geolocation SDK, with Android OS v10 set as the minimum requirement. Terminals must capture and transmit geolocation data at the start of each transaction, which will serve as a mandatory reporting field.
Merchant activities are restricted to within a 10-meter geofence from their registered business location. All existing terminals must be geo-tagged within 60 days of the circular, while new terminals must be geo-tagged before certification and activation. Terminals not routed through a PTSA will not be allowed to operate.
CBN will commence compliance checks from October 20, 2025. The central bank stressed that these measures are part of efforts to modernize Nigeria’s payment ecosystem, curb fraud, improve regulatory oversight, and ensure interoperability with international financial systems.
This new directive by the CBN comes amid rising concerns over cloned terminals and ghost agents operating outside regulatory oversight. Since the introduction of PoS terminals in 2013, it has become the go-to for cash for many Nigerians. This has seen the PoS network in the country surge in recent years, with over 1.5 million agents nationwide.
As of March 2025, there were 8.36 million registered PoS terminals, with 5.90 million active/deployed. Transactions hit a record N10.51 trillion in Q1 2025, a 301.67% increase from Q1 2024. However, this growth has come with risks, as Agents often unknowingly serve as access points for fraud and criminal activity.
Fraudsters have continued to exploit PoS terminals through various methods, often targeting the trust-based interaction between customers and operators or weaknesses in the technology itself. The rapid growth of PoS terminals has outpaced regulatory and security measures. Many terminals are operated by unlicensed agents, making it easier for fraudsters to infiltrate the system.
Efforts to Combat PoS Fraud
Nigeria’s financial authorities and fintechs have been taking steps to address PoS fraud.
In January 2024, the Nigerian Electronic Fraud Forum (NeFF), in collaboration with AMMBAN and NIBSS, announced a fraud-flagging feature for PoS terminals, set to launch by Q1 2024. This feature requires KYC details for certain transactions and aims to identify suspicious activities. However, some PoS operators were unaware of the initiative, indicating communication gaps.
Also, the CBN and Corporate Affairs Commission (CAC) mandated that all 1.9 million PoS agents register their businesses by September 5, 2024, to enhance accountability and reduce unlicensed operators.
Looking Ahead
PoS terminal fraud in Nigeria is a significant challenge driven by the rapid growth of electronic payments, lax oversight, and technological vulnerabilities.
While fraud cases are rising, financial losses have decreased, suggesting some improvement in detection and prevention. Initiatives like geo-tagging, fraud-flagging features, and stricter KYC requirements show promise to curb surging fraud cases.