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The Central Bank of Nigeria is clamping down on PoS fraud with geo-tagging and global payment standards, aiming to make every digital transaction traceable and trustworthy, JUSTICE OKAMGBA reports

Digital payments are reshaping commerce across Nigeria, from Lagos, Onitsha, and Abuja’s busy streets to the country’s growing online marketplaces. Cash is slowly losing ground to electronic transactions, but problems like fraud, technical glitches, and uneven access continue to complicate the country’s embrace of a fully digital economy.

To address these issues, Governor Olayemi Cardoso is steering the Central Bank of Nigeria toward stricter oversight of point-of-sale terminals and other electronic payment systems. The new regulations aim to strengthen transaction monitoring, protect consumers, and extend financial services to millions who have long remained outside the formal banking system.”

The new circular, titled “Migration to ISO 20022 Standard for Payment Messaging and Mandatory Geo-Tagging of Payment Terminals”, was issued on August 25, 2025, and signed by the Director of the Payments System Supervision Department at the CBN, Dr Rakiya Yusuf.

One of the components of these reforms is that all PoS devices must now be geo-tagged with GPS and registered with a licensed payment aggregator. Terminals are allowed to operate only within 10 metres of their registered location.

“The move is a counter-terrorism initiative that targets fraudsters who have exploited PoS channels to defraud unsuspecting users. This regulation enhances traceability and accountability and is a step that deserves commendation,” the former Zenith Bank chief economist told The PUNCH.

Under the new rules, all PoS terminals must now be linked to one of two licensed aggregators, NIBSS or Unified Payment Services Limited. Merchant acquirers are required to route all transactions through these aggregators, while payment processors must integrate with both systems. The CBN has also set a 60-day compliance window for existing terminals, with a full migration deadline of October 31, 2025.

Geo-tagging is central to this oversight. Every PoS machine must capture and transmit its location at the start of a transaction, with activity outside the 10-metre radius automatically flagged. Terminals that are not geo-tagged will be barred from processing payments.

According to the circular, “Geo-location data must be captured at transaction initiation and included in the message payload as a mandatory reporting field. Terminals not directly routed to a PTSA are not permitted to transact.”

The reforms are designed to mitigate fraud, improve consumer protection, and reduce operational risks associated with reliance on a single aggregator. The Financial Institutions Training Centre’s Fraud and Forgeries Report has highlighted the urgency, showing a 31.12 percent increase in PoS-related fraud cases in the first quarter of 2024.

Analysts say that geo-tagging, combined with tighter routing requirements, will make fraudulent transactions easier to detect.

“Previously, PoS devices could be moved between locations, facilitating illicit activities, including ransom collections,” economist Okeke explained. “Now, with mandatory GPS tracking and aggregator routing, operators will be accountable, and enforcement becomes feasible.”

Since their introduction in 2013, PoS terminals have quietly reshaped everyday commerce in Nigeria. By March 2025, the country had 8.36 million registered PoS terminals, with 5.9 million actively in use, a 119 per cent increase from 2.69 million the previous year, according to the Nigeria Inter-Bank Settlement System