The Central Bank of Nigeria has introduced a policy to advance its cashless economy initiative, capping daily cash-out transactions conducted by Point of Sale agents at N100,000 per customer.
This directive, issued on December 17, 2024, was signed by Oladimeji Yisa Taiwo on behalf of the Director of the Payments System Management Department.
The new measures are aimed at fostering electronic payment adoption, streamlining agency banking operations, and mitigating fraudulent activities. By ensuring uniform operational standards and enhanced monitoring in agent banking, the CBN seeks to address longstanding challenges in Nigeria’s financial ecosystem.
The CBN’s directive outlined a series of measures for principals of agent banking operations to implement immediately. A key aspect of the new regulations is the enforcement of daily and weekly cash withdrawal limits. Individual customers are now restricted to a maximum cash withdrawal of N100,000 per day and N500,000 per week.
For POS agents, the daily limit for cash-out transactions is capped at N1,200,000, ensuring that agency banking operations remain within manageable thresholds. These caps are intended to promote the use of electronic payment systems and reduce the risks associated with large cash transactions.
To maintain professional standards, POS agents are required to clearly delineate their banking services from merchant activities. All transactions must utilize the designated Agent Code 6010 to identify and separate agency banking activities.
Additionally, agents must conduct all operations exclusively through float accounts maintained with their principal financial institutions, ensuring centralized control and transparency in transaction processing.
The updated guidelines emphasize robust monitoring mechanisms to prevent unauthorized activities. POS agents’ accounts, linked to their Bank Verification Numbers, will be scrutinized to detect irregularities, especially transactions carried out outside approved float accounts.
Real-time reporting is mandated for all transactions, which must be routed through terminals connected to the Nigerian Inter-Bank Settlement System under the supervision of the Payments Terminal Service Aggregator. These measures aim to enhance compliance, mitigate fraud risks, and uphold the integrity of the financial system.
To ensure compliance, the CBN has emphasized the importance of oversight. Principals of agent banking operations will be held accountable for any lapses, and the apex bank plans periodic backend configuration checks. Violations of the directives will attract severe penalties, including monetary fines and administrative sanctions.
This intervention reflects the CBN’s commitment to fostering a secure, transparent, and efficient agent banking ecosystem, while also addressing concerns about fraud in the sector.
While the policy aims to strengthen Nigeria’s financial system, it may present challenges for stakeholders.
POS operators who rely on high-volume transactions could face reduced profitability, while customers, particularly in rural areas with limited bank access, may find the cash withdrawal restrictions inconvenient. These issues are particularly pronounced during the festive season, when cash demands typically surge.
The introduction of these measures underscores the CBN’s broader efforts to encourage the use of electronic payment channels and reduce Nigeria’s reliance on cash.
Stakeholders have been urged to comply with the guidelines and support the realization of the CBN’s vision for a cashless Nigeria. While the road to implementation may present obstacles, the long-term benefits of a secure and efficient banking framework promise significant gains for the country’s economy.
