UPDATED: CBN issues new guidelines for payment service providers

The Central Bank of Nigeria (CBN) has issued a new directive requiring all Payment Service Providers (PSPs) to integrate their transactions through a Payment Terminal Service Aggregator (PTSA), in an effort to streamline and track electronic transactions in the country.

The directive follows the bank’s prior issuance of a PTSA licence to Unified Payment Services Limited (UPSL) in April, with the intent to mitigate concerns around the channelling of all Point of Sale (PoS) transactions through a single aggregator.

In the circular dated 11 September, signed by Oladimeji Taiwo, director of the payments system management department, the CBN outlined that acquirers must now route all PoS transactions from merchant and agent locations through a CBN-licensed PTSA.

This directive extends to both physical and electronic PoS terminals. PoS transactions are to be handled only via processors certified by the CBN and nominated by acquirers.

The CBN also mandated that licensed processors integrate with both PTSAs, allowing acquirers the flexibility to choose which processor or processors to use.

It also directed Payment Terminal Service Providers (PTSPs) to ensure that all PoS devices are configured to automatically route transactions through the designated aggregator, by the acquirers’ specifications.

To ensure compliance, PTSPs are required to submit monthly returns to the CBN, detailing the number of merchants and agents they manage, as well as their PoS terminal deployment and the volume of corresponding transactions. The report is expected to reach the CBN no later than seven days after the end of each month.

The circular also warned that non-compliance within 30 days of issuance would result in appropriate sanctions.

PSPs are, therefore, required to regularise their operations and confirm compliance with the CBN in writing within this timeframe.

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This means PSPs like Interswitch, Paystack, Flutterwave, and others must route their transactions through a PTSA.

The PTSA ensures all PoS devices meet technical and operational standards through terminal certification, guaranteeing uniform functionality and reliability across the industry.

The CBN first issued a PTSA license to the Nigeria Interbank Settlement System Plc (NIBSS) in August 2011, making it the sole aggregator for PoS transactions.

However, to encourage competition and improve service quality, the CBN recently granted a second PTSA licence to UPSL.