POS operators groan under CBN  new guidelines

By Tumininu Ojelabi Hassan

Point of Sale, PoS, operators have raised concern over new CBN’s guidelines for agent banking in Nigeria, which includes barring agents from using Point of Sale (PoS) terminals meant for merchants to carry out cash-in and cash-out transactions.

The Central Bank of Nigeria (CBN), in a circular titled “Exposure Draft of the Regulatory Framework for Agent Banking in Nigeria” restricted agents from using merchant PoS meant for supermarkets, filling stations and small businesses for transactions.

Also, the circular states that agents are not allowed to charge customers fees outside regulated fees regime. The operational arrangement for payment agents is that they take a commission for transactions and this commission is not more than N100 or N200 for transactions of up to N10,000.

In addition, agents are prohibited to accept deposit or allow withdrawal above an amount which shall be prescribed, from time to time, by the Bank.

According to the operators, the guidelines, coupled with the cash crunch, have disrupted business operations. Our correspondent spoke with some PoS operators, who expressed their views concerning these regulations.

Kemi Jaiyesinmi, a PoS merchant at Alapere Ketu, Lagos spoke with our correspondent concerning the guideline by CBN.

“The guidelines given by CBN is not a bad one because some operators are using the merchant PoS operators for deposits and withdrawal of cash in order to make more profit than other PoS operators. The merchant PoS machines incur lower charges compared to the ones used by Agents. They didn’t ban PoS operators from depositing and withdrawing cash like people speculated, CBN only prohibited the use of merchant PoS terminals for depositing and withdrawing cash by Agents.

“I am an agent of Polaris bank SurePadi; due to the cash scarcity, I haven’t been operating my business for weeks. Surviving has been a struggle. The outrageous charges of buying cash has discouraged me from buying cash to avoid charging customers above the regulated fee.

“Based on the information I gathered, the cash will be in circulation very soon and normalcy will be restored, we will go back to charging N100 to withdraw N5000,” she clarified.

Francis Nwede, a PoS agent of Access bank Closa, expressed his grievances concerning the guidelines for agent banking.

“My major concern about the guidelines is the limit on withdrawal and deposits. Currently, I don’t have cash and this has affected patronage from customers. No customer is depositing cash, they all want to withdraw cash which isn’t available. The queue at the bank is too long. Banks aren’t giving out enough cash to POS operators.

“If the bank is disbursing N5000 to every customer, PoS operators get the same amount, which is quite unfair because we use cash to run our business. We shouldn’t be given the same amount other bank customers withdraw. The withdrawal limit shouldn’t affect PoS operators, it will affect our business drastically. I have been unable to withdraw cash at the bank since the beginning of this week, the last time I went to the bank the withdrawal limit for everyone was N3000. How will I run my business with N3000 cash per day?” he bemoaned.

A PoS agent, Ismail Abdulsam, gave his opinion concerning not charging customers above regulated fees.
“It is not our fault, we are charging customers above the regulated fees. I have been buying money. I received a call from the person I usually buy from before you came, I pay N20,000 to get N100,000. I charge N300 on N1000, the total amount I make on N100,000 is N130,000. My profit from the N130,000 is just N10,000. Despite the withdrawal limit, I don’t have access to cash that’s why I had to resort to buying cash to keep my business running,” he lamented.

In addition, a Firstmonie PoS agent, Chinedu Anozie cleared the air on the issue of CBN banning PoS operators. “It’s not that CBN banned PoS operators from depositing and withdrawing cash. The problem is that some small business owners use the PoS machine intended for payment of products by customers for other transactions like depositing and withdrawing cash.

“Ideally, customers shouldn’t be charged at supermarkets, stores and filling stations when paying for products they purchased. Some of these business owners, use the machine for other transactions like depositing and withdrawal of cash whereas they aren’t agents.

“For example, since the cash scarcity began, some people have been withdrawing cash from business owners, who aren’t agents. In my opinion, the main bone of contention is limit on deposits and withdrawal, as a result of the implementation of cashless policy; it’s really affecting our business. Before now, I used to have more than N150,000 cash, due to shortage of cash, it’s hard to withdraw N20,000,” he said.

According to the CBN, the agent banking initiative has resulted in the ubiquity of financial services agents across Nigeria, resulting in a significant and growing portion of financial transactions being conducted through the agents.

However, the apex bank mentioned that reviewing the regulations of agent banking was of vital importance to streamline activities of agent banking and to ensure that appropriate risk mitigation measures are taken by stakeholders.

“With the full implementation of the Cashless Policy of the CBN, it has become imperative to review the above-mentioned regulations on agent banking with a view to streamlining operations at agent locations and enhancing security of customers funds. In this regard, the two regulations have been reviewed and a revised regulation, titled ‘Regulatory Framework for Agent Banking in Nigeria’, produced, the circular said.