Business
CAC to crack down on unregistered PoS operators as Sept 5th deadline expires
The Corporate Affairs Commission (CAC) has announced that it will take decisive action against Point of Sale (POS) operators who failed to meet the September 5, 2024, registration deadline.
This follows a widely publicized directive issued on July 7, 2024, calling for all POS businesses to formalize their operations.
In collaboration with law enforcement agencies and other stakeholders, the CAC plans to shut down non-compliant operators, particularly those suspected of engaging in “unwholesome activities.” The Commission is also developing a comprehensive enforcement and sanction framework, which could involve severe legal consequences for defaulters.
Expressing disappointment over the low compliance rate, despite the widespread operation of POS businesses across Nigeria, the CAC praised those who adhered to the registration directive, recognizing their responsible efforts to legitimize their enterprises.
“We are to make it clear that the Commission is working with Law Enforcement Agencies and other relevant stakeholders to deploy a comprehensive enforcement and sanction framework that may include not only possible shutdown but other severe legal Consequences,”
However, the Commission criticised what it termed “recalcitrant operators,” many of whom have either refused or failed to comply with the registration requirement.
The CAC suggested that some of these operators might be engaging in “unwholesome activities” or have other undisclosed reasons for resisting formalisation.
In a public notice released on Friday, the CAC expressed concerns over inadequate compliance with the directive, despite the large number of PoS operators in the country.
However, the Commission commended those who have taken steps to formalise their businesses.
“Recalcitrant operators have refused to adhere to the advice for formalisation due possibly, to engagements in unwholesome activities or for some reasons best known to them,” the notice read.
The CAC stated that apart from the shutdown, there may be other severe legal consequences for defaulters. The Commission is deploying a comprehensive enforcement and sanction framework in collaboration with law enforcement agencies and other relevant stakeholders.
This development comes as the Association of Mobile Money and Bank Agents in Nigeria (AMMBAN) has challenged the CAC’s registration directive in court, insisting the mandatory registration was illegal.
The directive on PoS business registration came against the backdrop of frequent fraud incidents involving POS terminals and plans by the Central Bank of Nigeria (CBN) to stop trading in cryptocurrency or any virtual currency. A report by the Nigeria Inter-Bank Settlement System (NIBSS) Plc showed that POS terminals accounted for 26.37 per cent of fraud incidents in 2023.
The CAC stated that the registration aims to safeguard the businesses of fintechs and customers, as well as strengthen the economy.
Recall that in May 2024 the CAC announced that PoS agents of major fintechs in Nigeria including OPay, Palmpay, and Moniepoint, among others, have been given a deadline of July 7, 2024, to register their business.
Registrar general of the CAC, Hussaini Magaji, who announced this said this was the agreement with the PoS operators after a meeting in Abuja.
According to him, the registrations also align with the legal requirements and the directives of the Central Bank of Nigeria.
He added that the action was equally backed by Section 863, Subsection 1 of the Companies and Allied Matters Act, CAMA 2020 as well as the 2013 CBN guidelines on agent banking.
Magaji said the registration is aimed at safeguarding the businesses of fintechs and customers, strengthen the economy and tackle the surge in fraud in Nigeria’s financial industry.
The Commission also announced an extension of the mandatory registration for Fintech Operators to September 5, 2024.
It said the 60-day extension is to give sufficient time to operators particularly those in remote areas who might have encountered network challenges to register and continue with their businesses.
“The Corporate Affairs Commission wishes to notify Fintech Operators also known as Point of Sales Operators that the initial deadline of 7th July 2024 given for the registration of sole Agents, Super Agents, and Agents has been extended for sixty days beginning from 7th July 2024 to the 5th September 2024,” CAC said in the notice.
“This is to give sufficient time to Operators particularly those in remote areas who might have encountered network challenges to register and continue with their businesses.”