The Central Bank of Nigeria (CBN) has ordered all Point of Sale Operators in Nigeria to register their businesses with the Corporate Affairs Commission (CAC). The deadline is the 7th of July 2024.
This new directive was disclosed on Monday, 7th May 2024, after a meeting between the Registrar General/ Chief Executive Officer, CAC, Hussaini Magaji (SAN) and Fintechs. The directive, by extension, affects all financial institutions with POS merchants.
Hussaini Magaji highlighted that the new directive was “in line with legal requirements and the directives of the Central Bank of Nigeria” and not targeted at any groups or individuals.
According to Magaji, 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.
The official statement reads:
“The Corporate Affairs Commission and Fintech companies in Nigeria, better known as PoS operators, have agreed to a two-month timeline for registering their agents, merchants, and individuals with the CAC in accordance with legal requirements and the directives of the Central Bank of Nigeria.
“The agreement was reached today during a meeting between Fintechs and the Registrar-General, CAC, Hussaini Ishaq Magaji, in Abuja.”
What does this mean for Financial Institutions and POS Merchants?
POS merchants, typically agents operating on behalf of financial institutions, must now register as business entities with the CAC to continue operating. This directive mandates Financial institutions to re-onboard only those POS merchants registered with the CAC. Consequently, they may need to discontinue partnerships with unregistered POS merchants after the specified deadline (7th July 2024).
Compliance is straightforward for POS merchants: They must register themselves as business entities with the CAC.
However, Financial institutions face the challenge of efficiently reassessing their current POS merchant network and re-onboarding only those who comply with CAC registration requirements after the deadline.
How can Financial institutions Efficiently Evaluate and Re-onboard Compliant POS Merchants?
Financial institutions can seamlessly meet this directive by leveraging a Business Verification Solution. This tool enables them to verify their merchant's legal registration status with the CAC and other pertinent details before onboarding. By ensuring that only CAC-registered POS merchants are onboarded, they can effectively align with the CBN directive.
Verifying and Onboarding Merchants with Smile ID
With Smile ID’s Business Verification Solution, Financial institutions can automate their merchant onboarding and verification process. Our solution accurately verifies key business information directly from 10 million+ records in government databases, giving results in a second.
Verifiable information includes:
- Business name
- Address
- Registration number
- Key Stakeholders and shareholding information
- Ultimate Beneficial Owners (UBOs) and more
Financial institutions can also run AML checks on stakeholders and UBOs for more comprehensive compliance. Our AML solution instantly screens users against:
- 1100+ global and African sanctions
- PEP list of approximately 1.5 million individuals across four levels.
- Adverse media from 75,000+ reputable news sources with a minimum of 2 news sources from every country in the world.
For ease of use, financial institutions can seamlessly integrate these solutions into their existing technology infrastructure via API.
Bottom Line
With Smile ID’s business verification solution, Financial institutions can easily comply with the latest CBN directives and onboard their POS merchants.
Let’s help you automate the process. Get started today by booking a free demo with our experts to see how our solution can automate your merchant onboarding process and help you comply seamlessly.
