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New PoS Rules: What Exclusivity Means for Cash Access in Nigeria

Update Understanding the Exclusive Partnership Rule for PoS Agents The Central Bank of Nigeria (CBN) has ushered in a significant regulatory change that will reshape the landscape for Point-of-Sale (PoS) agents. Under the new guidelines, which come into full effect by April 2026, every PoS agent must operate exclusively with a single financial institution. This decision stems from efforts to streamline operations and enhance financial oversight in a rapidly growing sector where an estimated 8.36 million registered PoS terminals have seen vast transactional volumes. Potential Impacts on Cash Access and Agent Flexibility With approximately ₦10.51 trillion ($7 billion) processed in the first quarter of 2025 alone, the CBN's directive is intended to improve transparency and diminish fraud. However, for agents relying on the flexibility afforded by partnerships with multiple financial providers, this exclusivity comes with substantial risks. Agents like Ibukun and Chinyere have expressed concerns that being limited to one operator could disrupt their earnings and customer access, especially in regions witnessing frequent network failures and cash demands. The Tension Between Regulation and Convenience While the CBN aims to restore trust and ensure better service through stricter regulations, the policy shifts the power dynamics significantly. There’s a clear split between the need for rigorous oversight and the informal, adaptable nature of current PoS operations. Critics suggest that by mandating exclusivity, the CBN risks diminishing the convenience that these agents have previously offered, leading to potential longer queues and higher transaction costs for consumers. Financial Stability Versus Agent Viability While the guidelines aim to bolster financial stability, smaller agents may struggle to secure partnerships with larger banks, impacting their viability. The exclusivity requirement could inadvertently lead to market consolidation, where only the most robust agents thrive. Financial institutions, on the other hand, might end up facing higher recruitment costs as they vie for agent loyalty in a tighter operational framework. The Future of Nigeria’s Digital Financial Ecosystem As the CBN's regulations move forward, the adaptability of agents, banks, and fintech companies will be essential. Emphasizing the importance of negotiation and clear contracts could help agents protect their interests during this transition. To support the agents and ensure compliance, the CBN may need to adopt a phased approach, allowing for flexibility, particularly in underserved regions. Ultimately, the success of this new policy centers on its implementation and the collaboration among the stakeholders involved. It’s a balancing act between the enforcement of rules aimed at curbing fraud, enhancing consumer trust, and the necessity for financial inclusion within Nigeria's evolving agent banking landscape.