Inside the High-Stakes Push to Formalise Nigeria’s POS Network

As the January 1, 2026, registration deadline lapses, Nigerians say it will test the state’s ability to formalise the Point of Sale ecosystem without weakening the financial inclusion it created, writes Festus Akanbi

At 6:47 a.m. on a humid Tuesday in Olambe, a border community between Ogun and Lagos states, David Ojeme steadies a small point-of-sale (POS) terminal on a makeshift counter, a wooden plank balanced between two crates of phone accessories. A woman beside him waits impatiently to withdraw N20,000, glancing repeatedly at her wristwatch. Taped to the wall behind Ojeme is a faded certificate bearing the name Topeline Venture, which he claimed was registered with the Corporate Affairs Commission (CAC) in 2021. For Ojeme, that document represents legitimacy. For regulators, it is no longer enough.

“I already have a business name,” he says, tapping the certificate with quiet irritation. “Why should I pay again just to add ‘POS’ to it?”

New Order

That question, echoed in markets, motor parks, and street corners across Nigeria, sits at the heart of a fast-developing regulatory confrontation. As of January 1, 2026, the CAC, backed by the Central Bank of Nigeria (CBN) and security agencies, said that all POS operators must register agency banking as a distinct business activity under the Companies and Allied Matters Act (CAMA) 2020 and the CBN’s Agent Banking Regulations. Unregistered terminals, the commission has warned, will be seized. Fintech partners that continue to enable them risk sanctions and possible blocklisting.

The directive marks the most decisive attempt yet to impose order on a sector that has grown explosively, and largely informally, over the past five years. What began as a stopgap to address Nigeria’s chronic cash distribution gaps has evolved into a parallel financial infrastructure that processes trillions of naira annually and touches the daily lives of millions.

The CAC’s position is unambiguous. In a public notice issued a fortnight ago, the commission stated that, effective January 1, no POS operator would be permitted to operate without proper registration, adding that security agencies had been directed to enforce compliance nationwide. 

Registrar-General Hussaini Magaji has framed the move as a necessary response to mounting systemic risks rather than an attack on small-scale entrepreneurs.

Funneling Ransom Payment

According to the commission’s figures, 38,000 confirmed fraud cases in 2024 were linked to POS terminals, with estimated losses of N52.26 billion. Investigations, Magaji said, revealed that unregistered or poorly vetted devices were increasingly being used to facilitate ransom payments, money laundering, and cyber-enabled financial crimes. In his view, the absence of a verifiable corporate identity makes enforcement and accountability almost impossible once a terminal is implicated in wrongdoing.

Those concerns have also surfaced in the National Assembly. At recent parliamentary hearings, the Chairman of the House Ad-hoc Committee on Cryptocurrency and POS Operations, Hon. Olufemi Bamisile, disclosed that in some states as much as 40 per cent of kidnap ransom payments now pass through informal POS channels. 

While Magaji stressed that lawmakers were not seeking to criminalise operators, he argued that allowing millions of lightly regulated cash points to function outside effective oversight amounted to tolerating a shadow banking system.

Yet on the streets, among the agents who form the backbone of this ecosystem, the directive is viewed through a very different lens. For many, the POS terminal is not a business in itself but an add-on to an existing trade, frozen food, phone repairs, provisions, tailoring, deployed to attract foot traffic and earn marginal commissions. The idea that it should require a separate registration feels arbitrary to them.

 Double Registration?

In Ikorodu, Olusola Folowo operates a small frozen-food outlet. Regarding her CAC registration, she insists it already permits ancillary services. 

“The profit margin on POS transactions is tiny,” she explains. “On a N10,000 withdrawal, I might earn N200 after charges. From that, I still pay rent, generator fuel, and data costs. They now want an additional N25,000 for registration. How does that make sense?”

This perception is widespread. An analysis by THISDAY indicates that roughly 68 per cent of POS operators run multiple activities under a single registration, seeing the terminal as a payment instrument rather than a standalone enterprise. 

The National President of the Association of Digital Payment and POS Operators, Paul Okafor, has repeatedly drawn analogies to other tools of trade. 

“The POS is just a machine,” he argues. “A tailor does not register his sewing machine separately. Why should an agent register a terminal separately?”

Behind the rhetoric lies a stark numerical reality. Data from the Nigeria Inter-Bank Settlement System (NIBSS) shows that POS transaction values surged by 69 per cent in 2024 to N18 trillion, while the number of terminals more than doubled from about 2.4 million to 5.5 million. Of these, only around 3.5 million operators have completed CAC registration in line with current requirements, leaving an estimated compliance gap of two million devices.

 Structural Deficiences

The growth has been driven by structural deficiencies in Nigeria’s formal banking infrastructure. With just over 21,500 ATMs serving an estimated 63 million bank customers, POS agents have become de facto human ATMs, especially in peri-urban and rural communities where the nearest bank branch may be dozens of kilometres away. During the naira redesign and cash scarcity crisis, these agents became indispensable, keeping commerce alive when formal channels seized up.

Even within the regulatory establishment, there is an acknowledgement of this role. A senior CBN official, speaking on condition of anonymity, conceded that POS operators “saved the system” during that period. The same official, however, insisted that the scale the sector has now reached makes tighter controls unavoidable. Financial inclusion, he said, cannot be pursued at the expense of financial integrity.

Fintech Companies to the Rescue

Caught squarely in the middle of this standoff are the fintech companies that power the terminals. OPay, Palmpay, and Moniepoint together control roughly 72 per cent of the market, relying on millions of independent agents for last-mile distribution. 

Over the past year, these firms have launched compliance drives, offering free or subsidised CAC registration, police clearance vouchers, and airtime incentives to regularise their agent networks. Progress has been uneven.

A senior executive at a fintech company describes the situation as a classic prisoner’s dilemma. Disconnecting unregistered agents would cause firms to lose market share to competitors that respond faster. Failing to do so, however, exposes platforms to regulatory sanctions. 

The CAC has already hinted at graduated penalties for enabling platforms, beginning with public warnings and escalating to fines, service restrictions, and, in extreme cases, licence suspension. Industry sources estimate that as many as 1.8 million terminals currently operate through fintech partnerships without full compliance.

International experience offers both reassurance and caution. India’s 2018 mandate requiring police verification and formal registration for all banking correspondents led to a reported 60 per cent reduction in agent-related fraud, according to Reserve Bank of India data. Kenya’s 2021 Digital Credit Providers Regulations similarly tightened oversight of mobile money agents, though not without cost. In that case, an estimated 200,000 micro-agents exited the market, citing compliance expenses and administrative complexity.

For financial inclusion experts, these examples underscore the delicate balance regulators must strike. Dr. Okey Nwankwo, a consultant in the field, notes that formalisation almost always carries short-term pain. The critical question, he argues, is whether Nigeria can implement its framework without pushing a significant share of agents back into informality or triggering service gaps in underserved areas, as occurred in parts of India where compliance costs proved prohibitive.

January 1 has passed, and the contours of the possible outcomes are coming into focus. One scenario envisages mass compliance, driven by intensified fintech incentives, streamlined CAC processes, and mobile registration units reaching markets and rural hubs. Another anticipates selective enforcement, with authorities focusing on high-volume or high-risk agents while extending grace periods for smaller operators in remote communities. A third, more disruptive possibility would see widespread seizures and disconnections, potentially triggering cash shortages, higher transaction fees, and public backlash against both regulators and platforms.

What is clear is that the POS sector, once seen as a stopgap innovation, now sits at the centre of Nigeria’s financial system and its vulnerabilities. The deadline will demonstrate regulatory capacity, industry coordination, and the state’s ability to formalise a grassroots economic phenomenon without undermining the very inclusion it helped create.