The Corporate Affairs Commission (CAC) has announced that it will collaborate with law enforcement agencies and other legal channels to shut down unregistered Point of Sale (POS) operators following the expiration of a 60-day deadline issued for formalization. This move comes in response to inadequate compliance by POS operators with the CAC’s directive, which was first issued on July 7, 2024, and expired on September 5, 2024.
In a notice released on its official X (formerly Twitter) handle, the CAC emphasized that businesses that have failed to register may face severe legal consequences, including the possible shutdown of operations. The Commission expressed concerns over the low level of compliance, suggesting that those who have neglected to register might be involved in unwholesome activities.
“The Commission notes inadequate compliance with the directive for formalization when viewed from the background of the large number of POS operators in the country. Those who have taken steps to formalize in line with the Commission’s directive are commended for their positive attitudes,” the notice read. However, the CAC noted that “recalcitrant operators have refused to adhere to the advice for formalization due possibly to engagements in unwholesome activities or for some reasons best known to them.”
The CAC’s enforcement strategy is a clear indication of the government’s intent to regulate the rapidly growing POS sector, which has seen a significant surge in operators providing financial services, particularly in rural and underserved areas. By pushing for formal registration, the CAC aims to enhance the transparency and credibility of the sector, reducing the likelihood of fraud and other illicit activities.
The Commission also signaled its intention to enforce strict sanctions, stating that it is working with law enforcement and other stakeholders to develop a comprehensive framework for enforcement. This framework may include not only the shutdown of non-compliant operators but also other severe legal consequences.
However, this directive has faced opposition from the Association of Mobile Money and Bank Agents in Nigeria (AMMBAN), which has recently challenged the CAC’s registration requirements. AMMBAN argues that the registration process could place an additional financial burden on POS operators, many of whom are small business owners struggling to make ends meet. They contend that while formalization is important, the CAC should consider the economic realities of operators in the sector and propose a more lenient approach.
The debate around the formalization of POS operators highlights the delicate balance between government regulation and fostering an enabling environment for small businesses to thrive. On one hand, registration can offer protection and ensure operators abide by national regulations. On the other hand, the cost and bureaucratic process involved in registration may deter small operators, leading to resistance.
As the CAC prepares to enforce its directive, POS operators across the country will need to decide whether to comply or face the consequences. The coming weeks may see further dialogue between the CAC and AMMBAN, as both sides seek a workable solution to ensure transparency, business formalization, and the protection of small-scale financial agents. Nonetheless, the CAC’s warning is clear: recalcitrant operators who fail to register may soon find themselves out of business, as the Commission ramps up efforts to regulate the sector and weed out bad actors.
For now, the POS sector in Nigeria remains in a state of flux, with operators anxiously waiting to see how the enforcement will unfold.
