Daily Transactions Soar: Handlers Process ₦4.9 Billion in an Hour through PoS Systems
Nigeria's financial landscape has experienced a significant shift with the surge of Point of Sale (PoS) terminals across the country. This expansion has been instrumental in enhancing financial inclusion, providing millions of previously unbanked Nigerians access to formal financial services, particularly in underserved and rural areas.
According to various reports, over 11 million Nigerians who were previously unbanked have gained access to these services, contributing to a rise in financial inclusion to around 64% by 2023. PoS terminals serve as alternatives to traditional banking, offering an accessible solution where such access is limited, such as in Kano State and other rural areas.
The network of PoS terminals has grown rapidly, now numbering over 1.2 million active terminals nationwide. Transaction volumes have increased by 35% year-over-year, processing over ₦50 trillion annually. This scale supports a significant shift from cash-based to electronic payments.
PoS agents process large sums hourly, with approximately ₦4.9 billion transacted per hour. This deep integration in daily economic activities is a testament to the transformative impact of PoS terminals on transaction dynamics.
However, this growth has introduced regulatory and operational challenges. PoS agents sometimes face harassment and legal issues due to fraudulent or criminal activities facilitated through their terminals, even when unknowingly involved. This has highlighted the need for better regulatory oversight and frameworks to protect agents while combating illicit transactions.
The Central Bank of Nigeria (CBN) has noted concerns about liquidity being held outside the formal banking system, complicating monetary controls and inflation management, as large sums of cash are retained by PoS operators instead of circulating through banks. The CBN is actively working to address these issues.
Licensing regimes, such as the Payment Terminal Service Provider (PTSP) license, have become critical to managing POS deployment, ensuring service quality, and enforcing regulations. PTSP licensing requires significant capital and adherence to standards aimed at supporting the broader cashless policy and minimizing risks.
The broader payment system vision by the CBN includes boosting electronic payments and financial inclusion while enhancing system reliability to build trust, reduce risks, and attract investment. PoS terminals are a core component of this strategy but require complementary measures such as improved infrastructure, digital literacy training for operators, and tailored fintech solutions to sustain growth.
In response to these challenges, the CBN imposed a ₦1.2 million daily cash restriction on PoS agents and a ₦100,000 daily transaction limit on customers at the end of 2024. As of March 2025, there were 8.36 million registered PoS terminals in Nigeria, with 5.90 million active/deployed.
The organization is in talks with the National Orientation Agency to launch a nationwide campaign to improve the PoS space, focusing on educating operators and consumers about best practices and the importance of adhering to regulations. Collaboration between associations, banks, fintechs, and regulators is essential for cleaning up the PoS space and ensuring its continued growth and success.
In conclusion, the proliferation of PoS terminals in Nigeria has been a major driver of financial inclusion and cashless transactions growth, especially for underserved populations. However, the expansion also raises regulatory challenges, primarily related to fraud risk management and formal liquidity control, prompting ongoing policy and licensing enhancements to balance innovation with financial system stability.
- The rise in financial inclusion in Nigeria, driven by PoS terminals, has been a key factor in the growth of fintech, particularly in the realm of payments and mobile finance.
- Disturbingly, the success of PoS terminals has also introduced challenges, such as regulatory issues and fraudulent activities, necessitating a focus on enhancing regulatory oversight and adopting technology for fraud detection.
- To address these challenges, the Central Bank of Nigeria is implementing measures like the Payment Terminal Service Provider (PTSP) license and imposing daily cash restrictions and transaction limits, aiming to boost the cashless policy and minimize risks.
- To ensure the continued growth and success of PoS terminals, collaborative efforts among banks, fintechs, regulators, and associations are essential for improving infrastructure, providing digital literacy training, and tailoring fintech solutions.
