Nigeria’s fintech sector is crucial in light of the Central Bank of Nigeria’s (CBN) recent pronouncement about Point of Sale (PoS) Agents. This policy move departs from the multi-platform service that has enabled the recent rise in the fintech industry by requiring PoS Agents to only perform PoS transactions on behalf of a single financial institution, or super-agent. The effects of this policy have sparked intense debate because many players believe it will alter the cashless economy and lead to the demise of many fintech businesses, including small ones that are essential to Nigeria’s progress towards financial inclusion.
The CBN announced measures on October 6, 2025, to enhance oversight, reduce fraud, and improve service delivery in Nigeria’s agent banking sector. Nigeria has 8.3 million registered PoS terminals, and 5.9 million have been deployed. The legislation requires a strong terminal geo-tagging and geo-fencing policy and exclusivity for agents of one financial institution. These measures will change Nigeria’s fintech ecosystem’s operational and competitive environment.
PoS Agent Exclusivity: Concentrating Market Power
The policy’s main requirement mandates that PoS agents only be allowed to transact with a single principal — a bank, a mobile money operator, a microfinance bank, or a licensed super-agent. Mr. Fasasi Sharafadeen, National President of AMMBAN (Association of Mobile Money and Bank Agents in Nigeria), remarks how the industry has investments centered around major players, declaring, “From the approximately 200 service providers in Nigeria today, five of them control nearly 70% of the agent market, and making them exclusive will only further concentrate power in their hands.” This growth in concentration from the significant financial competitors could endanger small fintech firms’ very existence and ultimately alter market competition.
Nigerian PoS agents have been working on several platforms simultaneously, including PalmPay, OPay, and Moniepoint, because investors need flexibility to work under these brands, creating a competitive market and allowing agents to earn on multiple platforms. Limiting agents to one brand reduces flexibility, and many cash-strapped companies risk going out of business. Given that the informal fintech job platform employs millions and has a big cashless payment segment workforce, this regulation poses serious socio-economic risks. Sharafadeen warns the policy “will distort competition and expose thousands of small operators to losses.”
Beyond the immediate financial implications, fintech industry leaders express concern that the exclusivity mandate stifles innovation. Many describe it as a disruptive “shock” that could impede the nimbleness characteristic of fintech’s growth. By centralising control among a handful of dominant players, the policy could restrict the entry and expansion of new fintech firms and challenge the deep financial inclusion gains Nigeria has realised over recent years.
Geo-Tagging, Transaction Limits, and Compliance Requirements
The CBN requires all PoS terminals to have strong geo-tagging and geo-fencing controls and exclusivity rules until April 1, 2026. These solutions allow real-time terminal location verification to prevent unauthorised use and fraud in decentralised payment networks. Terminal mobility and transaction operations will be restricted to geo-fenced areas for security and traceability.
At PoS terminals, the policy caps daily transactions at N100,000 per customer to prevent transaction misuse and money laundering. While this limit is meant to deter illegal activity, it may hinder lawful high-volume transactions vital to many small firms and merchants. Accounts or wallets linked to the specified major institution must handle all PoS transactions for transparency and regulatory compliance. Any agent using non-designated accounts risks contract termination or blocking.
These regulations, intended to fortify Nigeria’s cashless payment infrastructure, come with increased operational complexities and compliance costs, especially for smaller PoS operators. The extensive rollout of geo-tagging technology demands significant adjustments in existing systems, causing concerns over potential service disruptions, cost burdens, and technical feasibility among the diverse network of agents.
Impact on Market Competition and Financial Inclusion
Nigeria’s fintech environment thrives on a wide array of over 200 PoS service providers and a sprawling agent network underpinning mass customer uptake. By constraining agents to exclusivity, the CBN’s updated policy potentially shifts market power toward larger fintech enterprises capable of meeting strict compliance demands, sidelining smaller players and startups.
Industry experts caution that the new regime risks engendering monopolistic tendencies, shrinking competitive spaces, and constraining consumer choices. The exclusivity clauses and stringent monitoring may precipitate the failure of many small fintechs lacking the resources to negotiate exclusivity deals or invest in geo-tagging infrastructure. This contraction threatens to retard Nigeria’s ardent financial inclusion agenda.
However, the CBN maintains that these reforms are vital to curbing rampant fraud, strengthening market discipline, and enhancing the safety of Nigeria’s digital payment ecosystem. The regulatory move aligns with global norms emphasising transparency, control, and risk mitigation in digital finance systems. Moving forward, Nigeria will have to balance fostering an environment where security, oversight, and entrepreneurial innovation coexist productively.
Nigeria’s Fintech Landscape: Growth Amid Economic Challenges
The CBN’s decisive regulations arrive amid remarkable growth and expansion within Nigeria’s fintech industry. Recent data shows the country hosts over 200 active fintech startups, attracting over $140 million in investment during the first half of 2024 alone. Digital payments remain the backbone of this growth, with e-payment transactions reaching approximately ₦1.56 quadrillion during the same period.
In one of Africa’s largest and most mature fintech ecosystems, firms like Moove Africa and Moniepoint secured significant funding rounds, reflecting investor confidence but simultaneously pointing toward increasing sector consolidation. According to a 2025 sector report, fintech accounted for 72% of all equity funding deals in Nigeria and witnessed a 16% year-on-year increase in transaction volumes.
Despite this impressive momentum, Nigeria faces economic challenges such as inflation rates close to 18%, currency instability, and broad regulatory tightening. Within this wider economic context, the CBN’s new agent banking rules—especially the PoS exclusivity requirement and terminal geo-tagging mandate—signal an effort to safeguard financial stability and enhance trust in digital financial services.
Following a new mandate requiring one ATM per 5,000 payment cards, banks are required to increase ATM density. Along with PoS terminal regulation, this technique addresses ATM lineups and downtime to increase cash access. Many Nigerians have used PoS terminals instead of ATMs for cash withdrawals since 2013, highlighting their relevance to the payments ecosystem. The CBN also introduced a daily PoS transaction limit of ₦1.2 million for agents to control liquidity risks and operational integrity.
Looking Ahead: Challenges and Uncertainties
The industry faces considerable challenges in facilitating compliance with the CBN’s policies before the April 1, 2026, enforcement deadline. Fintech companies, banks, and agent networks are upgrading systems to meet geo-tagging, transaction monitoring, and exclusivity mandates. Failure to comply could result in deactivating PoS terminals and removing agents from the formal financial system, with severe operational and economic repercussions.
Nigeria’s PoS network has millions of terminals in varied regions, making compliance difficult on a large scale. In rural and disadvantaged locations, many smaller providers lack the technology infrastructure and capital to adapt quickly. These concerns about service continuity and access could reverse financial inclusion gains.
Moreover, the policy introduces intensified competition among banks and fintech firms to secure agent loyalty, reshape market share, and invest in enhanced regulatory technology. This pressure may catalyse industry consolidation, but also sparks fears of marginalising fragile startups and informal agents that underpin digital financial ecosystem footholds in remote localities.
It’s unclear how these changes will affect low-income and rural consumers who rely on affordable, accessible electronic payment systems. Adequate enforcement and regulatory frameworks that account for Nigeria’s various socioeconomic landscapes are necessary for the policy’s implementation.
Thus, Nigeria’s fintech sector approaches this regulatory shift with cautious optimism and measured concern. The coming months and years will reveal whether the CBN’s policy ushers in a period of strengthened financial security while preserving Nigeria’s fintech sector’s vibrant entrepreneurial spirit and inclusivity for sustained growth.