CAC Registration, KYC, 3 Other Things PoS Business Owners Should Know About CBN's Directive

• The CAC has mandated that all point-of-sale operators and fintech merchants operating in Nigeria register their businesses by July 7, 2024
• This is in line with the guidelines that the CBN has established as missing this deadline might imply facing penalties or even jail time
• The things to know as PoS operators include CAC registration, Capital requirements and financial stability and others

Legit.ng journalist Zainab Iwayemi has over 3 years of experience covering the Economy, Technology, and Capital Market.

All PoS operators and fintech merchants in Nigeria are now required by the Corporate Affairs Commission (CAC) to register their companies by July 7, 2024, in accordance with the rules set forth by the Central Bank of Nigeria (CBN).

Comprehending these requests from CAC guarantees that companies operate PoS seamlessly and build a strong reputation in addition to assisting in avoiding legal troubles.

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The article outlines crucial CBN registration-related facts that all point-of-sale operators need to be aware of:

CAC registration

It is imperative that POS operators who intend to collaborate with banks and Mobile Money Operators (MMOs) have legal identification for their company through CAC registration. It also guarantees that the business is recognized as a legitimate entity by the law.

Operators will need to show their CAC Certificate of Incorporation, also called a Business Name Registration Certificate, to fulfil the requirements with the CBN.

KYC compliance

The CBN has mandated that all point-of-sale operators adhere to the Know Your Customer (KYC) policy. Verifying the credentials of the company and its representatives is essential to improving security and preventing fraud.

Implementing KYC gives your customers more confidence while safeguarding your company from possible risks. Additionally, it guarantees consistency and safety in corporate operations.

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Proof of your company's registered office as well as additional personal information, including a valid ID (such as a national ID or an international passport), will be required.

Capital requirements and financial stability

Possessing enough money guarantees that your business can complete transactions as planned. Having money on hand is essential for true operational functionality, particularly during periods of high transaction volume.

Every business account maintained with a regulated financial institution needs to have a capital level that satisfies the minimum requirement set by the CBN, which may differ based on the size of your organization.

Respecting transaction limits

Limitations on POS transactions have been enforced by the Central Bank of Nigeria (CBN) in an effort to lower the probability of illicit activities, including money laundering. Respecting these restrictions is essential to stay out of trouble with the law.

AML violations or over transactional limits may result in fines for businesses and/or license suspensions. Furthermore, you must report any transaction that seems suspect.

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Collaborating with MMOs or licensed banks

To finalize the CBN registration process, you must work with a Mobile Money Operator (MMO) or regulated financial institution to assist your registration and ensure that all relevant requirements have been met.

A company can speed up the registration procedure and create a continuing support relationship by collaborating with a licensed bank or MMO. Both your registration and ongoing compliance with regulations will be handled by the financial institution.

PoS operators slash charges

Legit.ng reported that the Central Bank of Nigeria has revealed that currency outside the banks surged to an all-time high of N3.28 trillion as of June 2024.

This represents 93% of the total N4.04 trillion in currency in circulation, indicating that banks have just over N1 trillion available to serve customers.

The CBN disclosed the figures in its money statistics data, which were published on its website and obtained by Legit.ng.

Source: Legit.ng