By Elvis Eromosele

The Central Bank of Nigeria (CBN) recently mandated that all Point of Sales (PoS) operators complete their registration with the Corporate Affairs Corporation (CAC) by July 7, 2024. This directive aims to formalize the operations of PoS businesses across the country, boosting regulatory compliance and promoting financial inclusion. 

However, for many PoS operators, this new requirement poses significant challenges, both financially and logistically. As micro-businesses, already grappling with economic uncertainties, the stringent deadline could threaten their survival and, by extension, the broader goal of financial inclusion in Nigeria.

PoS operators have become crucial players in Nigeria’s financial landscape, particularly in rural and underserved urban areas. They provide essential services such as cash withdrawals, deposits, bill payments, and transfers, bridging the gap between the unbanked population and formal financial institutions. Their accessibility and convenience have made them indispensable, particularly as the country pushes towards a cashless economy.

Reports indicate that there are close to a million registered PoS terminals in the country. According to Statista, “As of 2023, PoS payments in Nigeria were worth over 860 billion Nigerian naira, registering an increase compared to the previous years reviewed. Between 2015 and 2023, the number of POS payments rose significantly.”

These numbers tell a story. PoS operators are today an integral part of the financial inclusion value chain. So, efforts should be made to ensure the sustainability of the sub-sector. 

The real issue is that the tight registration deadline poses challenges to the operators. 

Number one, registering a business with the CAC involves several costs, including registration fees, documentation, and sometimes legal services. Many PoS operators, who operate on thin margins, may struggle to afford these expenses. For micro businesses that often subsist on daily earnings, diverting funds towards registration could mean a significant financial setback. What would likely happen is that many will not bother to register and may thus close shop.

Two, the July 7, deadline is too short. It provides the operators with a limited timeframe to complete the registration process. Given the bureaucratic hurdles often associated with such processes in Nigeria, this timeline is impractical for many. The urgency compounds the stress on operators who must balance their daily operations with the demands of registration. They may be forced to pay above the usual rate because of the urgency of the situation. 

Thirdly, many PoS operators are not fully aware of the registration requirements or the steps involved. Without adequate support and clear guidance from the CBN or CAC, they may find the process overwhelming. The absence of targeted awareness campaigns exacerbates this issue, leaving many operators in the dark. The National Orientation Agency (NOA) has a role to play here. 

The biggest challenge is the disruption of business activities. The focus on meeting the registration deadline may lead to operational disruptions. PoS operators might need to temporarily halt their services to manage the registration process, affecting their income and the communities that rely on their services.

It should not be this way. First and foremost, there must be some sort of financial assistance program. Yes, the government, in collaboration with financial institutions, could establish a financial assistance program to support PoS operators with the costs of registration. This could take the form of grants, subsidized loans, or fee waivers. Such assistance would alleviate the financial burden and ensure compliance without jeopardizing operators’ livelihoods.

Secondly, the regulator should immediately extend the deadline. Extending the deadline would provide PoS operators with a more realistic timeframe to complete the registration process. An extended period would allow operators to plan and save for the costs involved, reducing the risk of financial strain. A 12 to 24-month window sounds reasonable.

In addition, massive awareness campaigns and support have to be instituted. The comprehensive awareness campaigns are crucial to inform PoS operators about the registration requirements and process. The CBN and CAC could collaborate to disseminate information through various channels, including social media, community meetings, and local radio stations. Additionally, establishing support centres or helplines to guide operators through the registration process would be beneficial. 

The CAC should streamline the registration process. The thinking is that simplifying the registration process could encourage compliance. Streamlining documentation requirements and reducing bureaucratic red tape would make the process more accessible. Online registration portals with clear, step-by-step instructions could also expedite the process.

Furthermore, community engagement and partnerships must come into play. Engaging with community leaders and local organisations can help mobilize PoS operators and provide them with the necessary resources and information. Partnerships with non-governmental organisations (NGOs) and business associations could also facilitate workshops and training sessions to aid the registration process.

The CBN’s directive for PoS operators to register with the CAC is well-intentioned. It aims to formalize and regulate the sector. However, without addressing the financial and logistical challenges faced by these micro businesses, the directive could have adverse effects on the economy. Ensuring the sustainability of PoS operations is essential for maintaining financial inclusion and supporting Nigeria’s broader economic goals. 

Eromosele, a corporate communication professional and public affairs analyst, wrote via:


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