The Corporate Affairs Commission (CAC) is poised to enforce strict measures against Point of Sale (PoS) operators who failed to comply with its September 5 registration deadline.
In a statement issued on Friday, the CAC warned that non-compliant operators could face severe consequences, including business shutdowns and account freezes.
The crackdown comes after the commission’s 60-day grace period, announced in July, to allow PoS operators time to formalize their business registration under the Companies and Allied Matters Act (CAMA) 2020, expired with low compliance rates.
According to the CAC, the registration directive was aimed at regulating the growing number of PoS operators in Nigeria, ensuring legal compliance, and curbing illegal activities.
The Commission expressed concern that some operators might be involved in “unwholesome activities” and stressed that law enforcement agencies would collaborate to sanction defaulters.
The measures could also include freezing bank accounts linked to unregistered PoS businesses, a step already taken by some fintech firms like PalmPay
PalmPay, one of Nigeria’s major fintech companies, had earlier instructed PoS agents within its network to complete their registration or face the freezing of their accounts.
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“PalmPay fully supports the CAC’s directive… Failure to comply will result in accounts being frozen,” the company stated, underscoring its commitment to ensuring that its users abide by the regulatory requirements.
However, this enforcement push has been met with legal resistance from the Association of Mobile Money and Bank Agents in Nigeria (AMMBAN).
The association, which represents a significant portion of PoS operators, filed a lawsuit challenging the legality of the CAC’s directive. AMMBAN argues that the requirement for PoS sub-agents to register under CAMA is unwarranted, as they are not formal entities but merely service providers under larger fintech umbrellas such as OPay, Palmpay, and Moniepoint. The case is expected to be heard in court later this month
The CAC, in its defense, highlighted that the formalization of businesses is crucial in maintaining transparency and reducing financial crimes.
Furthermore, the Nigerian fintech and PoS sectors have experienced rapid growth in recent years, with PoS terminals accounting for a significant percentage of financial transactions across the country.
However, this surge has also seen a rise in fraud, with PoS-related scams contributing to 26.37% of fraud incidents in Nigeria in 2023
The commission’s decision to enforce registration follows reports of widespread non-compliance among PoS operators despite repeated warnings and public notices.
While businesses that complied with the directive were commended for their proactive steps, the CAC remains firm in its resolve to penalize defaulters.
“Recalcitrant operators have refused to adhere to the advice for formalization… We are working with law enforcement agencies and other stakeholders to deploy a comprehensive enforcement framework,” the CAC stated in its notice.
