With today, September 5, 2024 being the deadline given by the Corporate Affairs Commission (CAC) for banking agents, known as Point of Sale(POS) operators to register their activities or face prosecution, the Association of Mobile Money and Bank Agents in Nigeria (AMMBAN) has challenged the directive in court.

Recall that the federal government through the Corporate Affairs Commission (CAC) had issued a two-month registration deadline for POS companies, to register their agents, merchants, and individuals with the commission in line with legal requirements and the directives of the Central Bank of Nigeria (CBN).

This new directive came against the backdrop of frequent fraud incidents involving POS terminals and plans to stop trading in cryptocurrency or any virtual currency by the CBN.

According to a report by the Nigeria Inter-Bank Settlement System (NIBSS) Plc, POS terminals accounted for 26.37 per cent of fraud incidents in 2023, according to fraud. CAC said the move would curb fraud in the system, kidnapping and payment of ransoms.

The national general secretary, AMMBAN, Oluwasegun Elegbede, in an interview with LEADERSHIP, argued that the registration requirements imposed by CAC, violated the provision of the Companies and Allied Matters Act, Laws of the Federation of Nigeria, 2004, which “explicitly states that the commission has no jurisdiction over individuals not operating as a company.

“According to section 863(1) of the Companies and Allied Matters Act, 2004, the order to enforce CAC directive on individual PoS agents operating under their name is wrong and will be challenged, as it contravenes the Companies and Allied Matters Act, Laws of the Federation of Nigeria, 2004, which explicitly states that CAC has no jurisdiction over individuals not operating as a company.

“The matter is already in court and the court has scheduled this September for hearing. The court will have to intervene in the interpretation of the quoted section of the CAMA if individuals operating as a sub-agent (likened to a bank branch) must register with CAC,” Elegbede added.

Speaking on the concerns raised by CAC, Elegbede said, fighting crime is beyond the jurisdiction of CAC, adding that AMMBAN, in collaboration with law enforcement agencies, is curbing the prevalence of fraud in the industry.

“Every POS operator has a BVN/NIN, so they are all traceable. We can trace them through NIBSS, as no operator can have a POS without NIBSS knowing. We can trace them with their SIM cards.

We can also trace them to the company/bank that issued the POS machine to them. So, there is no hiding place for operators, if they default,” he added.

The national general secretary emphasised the critical role that mobile money agents play in driving financial inclusion across Nigeria, particularly in rural areas where traditional banking services are scarce.

Speaking on the impact of the registration on members, he averred that CAC registration cost nothing less than N35,000, adding that, some of their members do not even have that figure as capital. “These are young people trying to make a living for themselves. Imposing N35,000 on them could potentially cripple the operations of many small-scale agents across the country.

“While we understand the need for regulation, it is essential that such measures do not stifle the growth of the sector or place undue burdens on small business owners. We are confident that the court will recognize the merit in our case,” he stated.

Meanwhile, Newsmen findings show that many of the operators have been complying with the directive.

This is even as the association of PoS Operators say they are still awaiting the outcome of the court case on the matter.

Findings showed that many POS operators had registered as some of the financial service providers had created a way to make it easier to make registration with CAC.

A POS operator, Akeem, who uses a terminal provided by Opay said he had been able to register through the financial service provider.

He explained that he had been able to register online with the help of area coordinators sent by Opay at a sum of N19,000.

The same procedure had applied for POS operators who are using the Moniepoint terminals.

A poultry products retailer in Lagos, Kemisola, while speaking to LEADERSHIP said her financial services provider had blocked the terminal with her business name because she had not registered it with the CAC. However, she continues to use the terminal that is attached to her personal account.

“I use my personal account now. How much do I make from the sales that the government is requiring that I register. I got the POS because of the issues we faced last year during the cash scarcity and to make it easier for my customers to make payment without cash. I still pay charges on this POS and customers don’t want to pay the extra charges.

“If they block one of my personal accounts, I will just revert to collecting cash only because even transfers are not that reliable. There is a fake alert and sometimes payment reverses when the transfer is done.” she explained

many POS operators had registered as some of the financial service providers had created a way to make it easier to register with the CAC.

According to a POS operator, Akeem who uses a terminal provided by Opay, said he had been able to register through the financial service provider.

He explained that he had been able to register online with the help of area coordinators sent by OPAY at a sum of N19,000. The same procedure had applied for POS operators who are using the Moniepoint terminals.