The Central Bank of Nigeria, CBN, is clamping down on PoS fraud with geo-tagging and global payment standards, aiming to make every digital transaction traceable and trustworthy, DECENCY GLOBAL NEWS reports
Digital payments are reshaping commerce across Nigeria, from Lagos, Onitsha, and Abuja’s busy streets to the country’s growing online marketplaces. Cash is slowly losing ground to electronic transactions, but problems like fraud, technical glitches, and uneven access continue to complicate the country’s embrace of a fully digital economy.
To address these issues, Governor Olayemi Cardoso is steering the Central Bank of Nigeria toward stricter oversight of point-of-sale terminals and other electronic payment systems. The new regulations aim to strengthen transaction monitoring, protect consumers, and extend financial services to millions who have long remained outside the formal banking system.”
The new circular, titled “Migration to ISO 20022 Standard for Payment Messaging and Mandatory Geo-Tagging of Payment Terminals”, was issued on August 25, 2025, and signed by the Director of the Payments System Supervision Department at the CBN, Dr Rakiya Yusuf.
One of the components of these reforms is that all PoS devices must now be geo-tagged with GPS and registered with a licensed payment aggregator. Terminals are allowed to operate only within 10 metres of their registered location.
“The move is a counter-terrorism initiative that targets fraudsters who have exploited PoS channels to defraud unsuspecting users. This regulation enhances traceability and accountability and is a step that deserves commendation,” the former Zenith Bank chief economist told DECENCY GLOBAL NEWS.
Under the new rules, all PoS terminals must now be linked to one of two licensed aggregators, NIBSS or Unified Payment Services Limited. Merchant acquirers are required to route all transactions through these aggregators, while payment processors must integrate with both systems. The CBN has also set a 60-day compliance window for existing terminals, with a full migration deadline of October 31, 2025.
Geo-tagging is central to this oversight. Every PoS machine must capture and transmit its location at the start of a transaction, with activity outside the 10-metre radius automatically flagged. Terminals that are not geo-tagged will be barred from processing payments.
According to the circular, “Geo-location data must be captured at transaction initiation and included in the message payload as a mandatory reporting field. Terminals not directly routed to a PTSA are not permitted to transact.”
The reforms are designed to mitigate fraud, improve consumer protection, and reduce operational risks associated with reliance on a single aggregator. The Financial Institutions Training Centre’s Fraud and Forgeries Report has highlighted the urgency, showing a 31.12 percent increase in PoS-related fraud cases in the first quarter of 2024.
Analysts say that geo-tagging, combined with tighter routing requirements, will make fraudulent transactions easier to detect.
“Previously, PoS devices could be moved between locations, facilitating illicit activities, including ransom collections,” economist Okeke explained. “Now, with mandatory GPS tracking and aggregator routing, operators will be accountable, and enforcement becomes feasible.”
Since their introduction in 2013, PoS terminals have quietly reshaped everyday commerce in Nigeria. By March 2025, the country had 8.36 million registered PoS terminals, with 5.9 million actively in use, a 119 per cent increase from 2.69 million the previous year, according to the Nigeria Inter-Bank Settlement System.
ISO 20022 standards
In addition to geo-tagging, the CBN is requiring the adoption of the ISO 20022 global standard for payment messaging by October 31, 2025. Developed by SWIFT, this standard provides a unified messaging protocol for transactions, enhancing data quality and streamlining domestic and cross-border payments.
All PoS devices must run on Android version 10 or higher to integrate with the National Central Switch, which hosts the software kit for geolocation monitoring and geofencing.
“All payment transaction messages exchanged domestically or internationally must be formatted in ISO 20022 in line with CBN and SWIFT specifications,” the circular notes. Accurate population of mandatory data elements, including payer/payee identifiers and transaction metadata, is required to ensure system integrity.
For fintech operators, the adoption of ISO 20022 aligns Nigeria’s payment ecosystem with international standards. It facilitates interoperability with other global financial systems, reduces reconciliation errors, and improves transaction traceability. The CBN hopes these standards will also attract foreign investment, given investors’ growing interest in digital financial platforms that adhere to global best practices.
Development economist and Chief Executive Officer of CSA Advisory, Dr Aliyu Ilias, welcomed the move, sharing his own experience with fraud. “I am a victim of fraud here in Abuja, where I lost N150,000 through PoS,” he told The PUNCH. “Since these transactions will now be traceable, it should help reduce such cases. The challenge, however, is that it might make charges more expensive for bank customers.”
Public engagement
To strengthen consumer protection, the CBN launched the Unified Complaints Tracking System. Through the USSD code *959#, consumers can verify licensed institutions, lodge complaints, and track resolution status.
During the CBN Fair in Lagos, acting Director of Corporate Communications, Hakama Sidi Ali, said, “The core objective of this initiative is to sensitise the public on how the bank’s policies and innovations can enhance their lives and livelihoods, contributing to the growth of the Nigerian economy.”
Lagos Branch Controller at the CBN, Sunday Daibo, emphasised the importance of digital inclusion. “Alternative financial services are no longer optional; they are bridges connecting underserved populations to the formal financial system. Our aim is to ensure everyone, from small traders in rural towns to urban consumers, can access safe, reliable digital payment solutions.”
PoS operators
PoS terminals have become crucial not only for convenience but also for practical business operations. A PoS aggregator based in Lagos, Tinuke Adebola, said, “PoS terminals are transforming the financial landscape. Banks are no longer absorbing the rising costs of maintaining ATMs that require power, security, and cash handling. With PoS, merchants have direct control over transactions and reduce reliance on cash, which is often risky.”
Another aggregator, Oloye Adigun, highlighted the role of network quality and machine availability. “Bills payment, bank-to-bank transfers, cash receipts, and third-party payments are now key transactions carried out via PoS machines,” he said. Daily earnings for operators vary between N5,000 and N50,000 depending on location, customer volume, and services offered.
President of the Bank Customers Association of Nigeria, Uju Ogubunka, observed, “Brick-and-mortar banking is giving way to digital banking, where transactions are completed in seconds, saving costs and providing convenience. People increasingly prefer technology-driven solutions tailored to everyday needs.”
Fintech firms and banks, including Opay, Moniepoint, GTB, UBA, and PalmPay, have been at the forefront of this transformation. In the first quarter of 2025 alone, PoS transactions totalled N10.51tn, more than triple the N2.62tn recorded in the same period in 2024. The surge reflects not just volume growth but a shift toward a digital financial culture, where trust in electronic payments increasingly replaces the uncertainties of cash handling.
“Many innovations that other countries are only now experiencing have been part of our system for years,” Governor Cardoso noted. “Nigeria’s dynamic fintech ecosystem has driven financial inclusion and positioned the country as a hub of innovation in Africa.”
The growth of PoS usage is particularly significant in urban areas, where small businesses rely on electronic payments to reduce cash handling risks. In Lagos Island’s markets, for example, street vendors, small-scale traders, and service providers have adopted PoS terminals to handle daily sales, often replacing manual cash counting with digital records.
Similarly, in rural regions, PoS agents provide financial services to communities previously excluded from banks, bridging gaps in accessibility. A recent survey indicated that in areas with fewer than 50,000 residents, over 60 per cent of small merchants now accept digital payments through PoS devices, demonstrating the technology’s penetration beyond major cities.
Challenges, opportunities
While PoS adoption has surged, challenges remain. Network disruptions, electricity shortages, and occasional technical failures can limit terminal functionality. Cybersecurity risks also persist, requiring continuous monitoring and robust fraud detection systems.
Nonetheless, opportunities abound. The CBN and fintech operators are exploring agent banking expansion, mobile PoS integration, and digital credit solutions. With financial literacy programs targeting underserved populations, more Nigerians can engage with digital financial services confidently.
Analysts suggest that Nigeria’s PoS ecosystem, if fully compliant with geo-tagging and ISO 20022 standards, could serve as a model for other African economies seeking to deepen financial inclusion.
Financial inclusion
The CBN continues to balance innovation with regulation. Digital solutions, from mobile and online banking to artificial intelligence and blockchain, have challenged traditional systems while improving efficiency.
Governor Cardoso has launched a comprehensive review of consumer protection regulations to address emerging risks from fintech and digital banking. The goal is to ensure access to reliable, efficient, and secure services for all Nigerians.
“Financial inclusion offers equity and opportunity for all Nigerians. We aim for 80 percent adult financial inclusion by 2026,” the CBN chief noted. “Through partnerships with banks, fintechs, agent banking, and targeted support for women and rural communities, we are creating a financial ecosystem that leaves no one behind.”
The governor stressed the importance of trust: “Our journey ahead demands transparency and accountability. As regulators, we will continue to engage with stakeholders, providing regular updates on policy outcomes and adjusting strategies based on empirical evidence.”
Conclusion
Nigeria’s payments ecosystem has outpaced many advanced economies, though global recognition remains limited. Despite a challenging macroeconomic environment, Nigerian fintechs continue to attract significant foreign investment, with several achieving global unicorn status this year. Their innovations, alongside traditional financial institutions, have expanded transaction volumes and made services more affordable and accessible.
The CBN’s tighter PoS regulations and adoption of global standards reflect a strategic effort to reinforce trust and reliability in the country’s digital financial landscape. By tying every PoS device to precise GPS coordinates and implementing robust transaction messaging standards, regulators aim to make fraud nearly impossible and ensure that digital channels remain safe for all users.
