Point of sale operators in Nigeria, under the auspices of the National Association of Mobile Money and Banking Operators, said they had decided to challenge the legality of mandatory registration of its members by the Corporate Affairs Commission for its members in court.
The President of the association, Fasasi Sarafadeen, decried a Directive that mandated PoS operators to register with the CAC and added that they are left with no option rathern go to court to seek redress, according to The Punch.
Sarafadeenclaimed that the directive from the CAC violated the provision of the Companies and Allied Matters Act, Laws of the Federation of Nigeria, 2004, which “explicitly states that the commission has no jurisdiction over individuals not operating as a company.”
He said, “According to section 863(1) of the Companies and Allied Matters Act, 2004, the order to enforce CAC directive on individual PoS agents operating under their name is wrong and will be challenged, as it contravenes the Companies and Allied Matters Act, Laws of the Federation of Nigeria, 2004, which explicitly states that CAC has no jurisdiction over individuals not operating as a company.
“We shall challenge it legally. The court will have to intervene in the interpretation of the quoted section of the CAMA if individuals operating as a sub-agent (likened to a bank branch) must register with CAC.
“CBN is right, no issue, the memo is clear, it only applies to non-individuals, unlike the Corporate Affairs Commission who generalised. We are in talks with the lawyer representing the association already, and a league of human rights lawyers whom we are not disclosing who they are for now.”
He explained the categories, saying that Point-of-Sale agents were divided into two groups.
He expounded, “CAMA only mandates registration of individuals operating as a company. There are two categories of POS agents: individuals and non-individuals. Individual agents operate under their names, such as Musa Caroline or Abubakar Audu, and are typically profiled with financial institutions under their names.
“Non-individual agents, on the other hand, operate under registered or unregistered business names, such as Wale Ventures or Johnson Enterprises. It is this second category of agents that the Corporate Affairs Commission can enforce the law on, as they are required to register their business names by the law.”
Sarafadeen pointed out that the subagents are independent branches of a company which has already been approved by the Commission for Corporate Affairs.
“Sub agents are not carrying out as an independent company but branches of a company. For example, while commercial banks operate with bank branches across the country, Fintechs (MMO, super agents, and co) operate with a network of sub-agents. It is therefore lack of knowledge of the workings in a Fintech/agent banking industry to be tagging sub-agents as illegal,” he added.
He stated that instead of imposing regulations on each POS agent who operates in his name, the CAC should concentrate its efforts on tackling the high rate of registration failure of registered businesses across Nigeria.
“The Corporate Affairs Commission should prioritise addressing the alarming failure rate of registered businesses in Nigeria, rather than targeting sub-agents. With over 4.9 million businesses registered, 50 per cent of which fail every five years, this should be the focus.
“In addition, the Central Bank of Nigeria’s memo specifically addressed non-individual agents, not individual sub-agents, and CAC’s threat to harass sub-agents is unwarranted and excessive,” he added.
The Federal Government through the Corporate Affairs Commission had issued a two-month registration deadline for Point of Sales companies, to register their agents, merchants, and individuals with the commission in line with legal requirements and the directives of the Central Bank of Nigeria.
The CAC said the move would prevent kidnapping and ransom payments.
This follows the frequent cases of fraud involving POS terminals and plans by the Central Bank of Nigeria to stop trading in cryptocurrencies or virtual currencies.
According to the Nigeria Interbank Settlement System Plc’s Fraud Report for 2023, POS terminals accounted for 26.37 % of all fraud cases in that year.
There are more than 1.9 million point-of-sale terminals in use by merchants and individuals throughout the country, according to Nigeria’s Interbank Settlement System.
