CBN Sets Daily Cash-Out Limit for POS Transactions at N100,000 per Customer

The Central Bank of Nigeria (CBN) has introduced a daily cash-out limit of N100,000 per customer for all Point of Sale (POS) cash-out transactions.

This new directive, effective from December 17, 2024, is part of efforts to strengthen agency banking operations, promote electronic payments, and support Nigeria’s cashless economy goals.

Signed by Oladimeji Yisa Taiwo for the Director of the Payments System Management Department at the CBN, the circular was sent to Deposit Money Banks, Microfinance Banks, Mobile Money Operators, and Superagents. The policy aims to ensure uniform operational standards, prevent fraud, and improve monitoring across the agent banking sector.

Key Directives for POS Agents

The circular outlined several essential measures for agent banking operations:

Daily Cash-Out Limit: POS agents must ensure no customer withdraws more than N100,000 in a single day, irrespective of the channel used.

Cumulative Daily Limit for Agents: The total amount of cash-out transactions by each agent must not exceed N1,200,000 daily.

Weekly Withdrawal Cap for Customers: Customers are limited to N500,000 in weekly cash withdrawals.

Separation of Banking and Merchant Activities: POS agents must distinctly separate their banking services from merchant activities and use Agent Code 6010 for all transactions.

Exclusive Use of Float Accounts: All banking operations must go through float accounts held with principal institutions.

Monitoring of Agent Accounts: Institutions must monitor accounts linked to agents’ BVNs to identify any unauthorized activities outside designated float accounts.

Real-Time Transaction Reporting: POS agents must connect their terminals to the Payments Terminal Service Aggregator (PTSA) and submit daily transaction reports electronically to the Nigerian Interbank Settlement System (NIBSS). The CBN will provide the reporting template.

CBN to Implement Oversight Mechanisms

The CBN stressed that all principals remain responsible for the actions and oversight of their agents. To ensure compliance with these guidelines, the apex bank will conduct regular oversight, including backend checks on operations.

Violations of these directives will result in severe penalties, including monetary fines and administrative sanctions. These measures are part of the CBN’s broader commitment to creating a secure, efficient, and transparent agent banking system while advancing Nigeria’s cashless policy.

Broader Implications

This intervention seeks to address the risks of fraud linked to agent banking while encouraging the use of electronic payment methods. However, the new limits may challenge POS operators, particularly those relying on high-volume transactions to maintain their businesses.

Customers, especially in rural areas with limited bank access, might face challenges and reduced cash availability during this festive period as a result of the new limits.

The CBN has urged all stakeholders to comply with the new guidelines to support the development of a stronger and more efficient cashless financial system in Nigeria.

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