Fresh troubles for POS operators as CBN sets new daily cash-out limit

The Central Bank of Nigeria has established a daily cash-out limit for POS operators, leading to additional challenges for both POS operators and customers.

This intervention comes as part of broader efforts by the CBN to advance its cashless policy and address the challenges posed by the heavy reliance on cash in Nigeria’s economy.

This policy, part of a new directive issued on December 17, 2024, and signed by Oladimeji Yisa Taiwo for the Director of the Payments System Management Department at the CBN, aims to streamline agency banking operations, encourage electronic payment adoption, and enhance the country’s cashless economy drive.

According to the statement released by Apex Bank, a daily transaction limit of N100,000 per customer for cash-out transactions conducted by Point of Sale (POS) agents has been mandated.

The circular, which was released on Tuesday and addressed to Deposit Money Banks, Microfinance Banks, Mobile Money Operators, and Superagents, emphasizes the need for uniform operational standards, fraud prevention, and improved monitoring within the agent banking sector.

Key directives for POS agents
The circular outlined several critical measures for principals of agent banking operations to implement immediately:

Daily cash-out limit: POS agents must ensure no individual customer withdraws more than N100,000 daily, regardless of the channel.

Cumulative daily limit for agents: Each agent’s total cash-out transactions should not exceed N1,200,000 daily.

Weekly withdrawal cap for customers: Customers are restricted to a maximum cash withdrawal of N500,000 per week.

Separation of agent and merchant activities: Agents are required to clearly demarcate their banking services from other merchant activities and use the approved Agent Code 6010 for all transactions.

Exclusive use of float accounts: All agency banking activities must be conducted through float accounts maintained with the principal institutions.

Mandatory monitoring of agent accounts: Institutions must monitor accounts linked to agents’ BVNs to identify any unauthorized banking activities outside designated float accounts.

Real-time transaction reporting: Agents are required to connect their terminals to the Payments Terminal Service Aggregator (PTSA) and send daily transaction reports to the Nigerian Inter-Bank Settlement System (NIBSS) electronically. The reporting template will be provided by the CBN.

CBN plans periodic oversight

The CBN reiterated that all principals remain responsible for the actions and omissions of their agents in relation to banking services.

To ensure compliance, the apex bank will conduct periodic oversight, including backend configuration checks.

Violations of these directives will attract severe penalties, including monetary fines and administrative sanctions. This measure underscores the CBN’s commitment to ensuring a secure, transparent, and efficient agent banking ecosystem.

The policy also seeks to curtail fraud associated with agent banking operations while promoting the use of electronic payment channels.

Implications for POS operators and customers
While the new policy aims to enhance security and accountability, it may pose challenges for POS operators who rely on high-volume transactions to sustain their businesses.

Customers may also face inconveniences due to the reduced cash availability, particularly in rural areas with limited access to banks, especially during this festive period.

The CBN has urged stakeholders to adhere to the guidelines and contribute to the realization of a more robust and cashless financial system in Nigeria.