Police to Crackdown on Illegal PoS Operators after CAC Registration Deadline

• The government had issued a two-month registration deadline for PoS operators to register as corporate entities
• PoS operators in Nigeria who fail to register with CAC at the expiration of the deadline will be tagged as illegal
• As a result of their failure to register their operations, security operatives would escalate actions against them

Legit.ng journalist Victor Enengedi has over a decade's experience covering Energy, MSMEs, Technology and the stock market.

The Federal Government has pledged that security agencies will take action against Point-of-Sale (PoS) operators who do not comply with the directive to register with the Corporate Affairs Commission by July 7, 2024.

Hussaini Magaji, the Registrar-General of the CAC, announced this during the formal launch of the CAC registration for agents and fintech merchants in Abuja on Wednesday, May 9, 2024.

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This initiative comes after the federal government mandated the nationwide registration of PoS operators, citing the potential to reduce kidnapping and aid security agencies in apprehending recipients of ransom payments from kidnap victims.

Authorities to go against unregistered PoS operators

During the event, Hussaini reaffirmed the government's commitment to complete the implementation of the mandate by establishing a fully digitized service centre for seamless registration.

According to Punch, Magaji emphasized that the timeline was not aimed at singling out particular groups or individuals but was genuinely intended to protect businesses.

Additionally, he warned that those who fail to register by the deadline would be treated as criminals.

He said:

“After the deadline, we would go after defaulters, If you have been identified as a criminal, security agents will go after you, we will go after them because some are being chased by the security agencies already.”

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He detailed the advantages of registration, highlighting that it extends beyond taxation to include access to loans, legal status, and compliance with regulatory standards.

Reacting to the order to register their business with the CAC, a PoS agent, Lukman Ogunde, told Legit.ng that the process of registering will add more them on them which will be reflected in the increase in charges.

He said:

"We don't even make so much money for us to be thinking of spending time and money to register with the CAC. The money spent in undergoing the process will in-turn be reflected in our intention to increase charges on transactions."

Tunde Oke, an Abuja-based financial analyst, told Legit.ng that he is in agreement with the directive by the CBN and CAC.

He said:

"When it comes to financial transactions, the Central Bank of Nigeria (CBN) takes great interest. Safeguarding the finances of Nigerians is a top priority for the CBN. Every day, numerous Nigerians fall victim to fraud after using PoS services, prompting widespread concern. One significant advantage of the CBN's actions is the potential to identify and eliminate fraudulent PoS agents, ensuring only genuine ones operate."

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Banks, PoS losses to fraud

Although PoS machines have brought significant convenience to financial transactions in Nigeria, numerous individuals in the country have fallen prey to fraudulent activities.

Legit.ng earlier reported that the Nigeria Inter-Bank Settlement System had revealed that banks and PoS operators suffered N17.67 billion in losses due to fraud in 2023.

According to the fraud report, PoS terminals contributed 26.37% of fraud incidents in 2023. It added that over 1.9 million PoS terminals are deployed by merchants and individuals across the country.

PoS operators move to hike charges

In related news, Legit.ng reported that some PoS agents have said that the recent mandatory enforcement of CAC registration would result in a hike in charges.

The operators frowned at the new order of the CAC and the CBN for them to register their operations.

The agents said the registration, which would require fee payments, would affect transactions, which could be passed on to the customers.

Source: Legit.ng