CAC and POS operators’ registration

By Babatunde Ayedoju

Point of Sales (POS) machines became popular in 2013 when the Central Bank of Nigeria (CBN) introduced agent banking system to the country. Since then, Nigerians have enjoyed ease in withdrawing money from their bank accounts and even transferring money to other accounts. Most of the things that an individual would have gone to a bank to do can be sorted out at a POS stand for a fee.

Today, according to the Nigerian Inter-Bank Settlement System, there are over 1.9 million POS terminals are in use nationwide. Some are used by individuals, while others are used by corporate bodies.

No doubt, POS has turned to a source of income and a small scale business easy to set up in a country that is bedeviled with an unemployment rate of 5.3 percent in Q4 of 2022 and 4.1 percent in Q1 of 2023, according the National Bureau of Statistics (NBS) in its Nigerian Labour Force Survey (NLFC). This is alongside the poverty rate which Price Water Cooper (PwC), at the beginning of this year, projected that it would rise to 38.8 percent.

Obviously, aside creating jobs for the teeming population of unemployed youths and middle-aged Nigerians, POS has reduced the rate at which people visit banks.

However, the fate of POS operators and customers would take a new turn, as the Corporate Affairs Commission mandated all PoS agents of major financial technology companies in Nigeria to register their businesses. The Registrar-General of the CAC, Hussaini Magaji, in a statement released by the commission, had stated that the decision was agreed upon with the PoS operators during a meeting in Abuja, emphasizing that the registration process aligned with both legal requirements and the directives of the CBN.

According to him, the action is supported by Section 863, Subsection 1 of the Companies and Allied Matters Act, CAMA 2020, and the 2013 CBN guidelines on agent banking.

Magaji clarified that the registration timeline was not intended to target specific groups or individuals but was genuinely aimed at safeguarding businesses.

“Magaji, therefore, said that the timeline for the registration, which will expire on July 7, 2024, was not targeted at any groups or individuals but genuinely aimed at providing protection for businesses,” the statement said.

In a swift reaction, some POS operators, under the aegis of Association of Mobile Money and Bank Agents in Nigeria (AMMBAN), said that they would sue CAC for mandating them to register their businesses within the next two months.

Addressing journalists, National General Secretary of the association, Elegbede Oluwasegun, citing two major sections of the CBN policy and CAMA to back AMMBAN’s position, said that CAC had no jurisdiction over individuals not operating as a company.

He said, “There are two differences where we have advised our agents appropriately regarding their position in the ongoing issues. Even though it was not made public, we are advising our members accordingly to ascertain where they stand as the policy is concerned and we cited two major sections of the CBN policy and CAMA to back our position.

“In CAMA, only a non-individual agent is required to register with CAC. For example, if your name is John Doe, you are not liable for CAC registration and you can get the reference from CAMA 2022, section 18 (2).”

While saying that the CBN’s policy recognises both individual and non-individual agents, Mr Elegbede added, “A provision store operating as ‘Iya Seun’ store, not registered, is not bound by the law to go and register their business so long they are not a business name. Same with our kind of business, and that is our position.”

Commenting on the matter, Dr Bayo Fasunwon from the Department of Political ScienceAdekunle Ajasin University, Akungba-Akoko said that the decision of CAC to have all POS businesses registered is a correct one because it is a financial business as well.

He pointed out that the move would protect both the business owner and the client, “especially considering the fact that it has been an avenue for a lot of financial misconducts.”

Dr Harrison Idowu, also from the Department of Political Science, Adekunle Ajasin University, Akungba-Akoko, viewed it from two perspectives. On one hand, he said that it is proper for every business to be registered with the government, so that the government can trace every illegality that takes place in such businesses, “because we also know that it is associated with crime.”

On the other hand, he described this move by the CAC as doing the right thing at the wrong time, considering the fact that POS operators are small scale business people who are trying to make ends meet in an unfavourable economy.

His words: “These are people involved in small scale enterprises to make ends meet, and we know that small scale enterprise is the engine room of any economy. Most of them are poor Nigerians who are merely seeking to make ends meet. This is a case of doing the right thing at the wrong time. The economy is biting hard on the citizens. Maybe there should be some subsidy or reduction in the cost of registration for them or make it free, especially if the government is not doing it for profit making purpose.”

Mr Martins Chibueze, an Akure-based POS operator said that it is not a good idea at all, as it would bring hardship on both POS operators and their customers.

He said, “What it means is that an average POS person has less than N150,000 start up capital, then he removes N20,000 to N25,000 out of it to register his business. A lot will not be able to register and those who are able to register will increase their charges. Even the customers too will complain, by the time they are not able to afford the new charges. If POS operators were charging N100 for N5,000, they may add N50 or N100 to it. It’s as if they just want to tax POS operators and by the time POS operators factor it into their charges, the public will be badly affected.”

Mr Chibueze argued that since every account has Bank Verification Number (BVN) and National Identity Number (NIN), whatever information or database the government wants to get about POS business owners can be obtained through those channels.

CAC and POS operators’ registration

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