The Central Bank of Nigeria (CBN) has issued a new directive that will change how point-of-sale (POS) services operate across the country.
In a circular dated August 25, 2025, sent to banks, microfinance institutions, mobile money operators, and fintechs, the apex bank mandated two major requirements: Migration to ISO 20022, the global payments messaging standard, by October 31, 2025; and geo-tagging of every POS terminal in Nigeria.
The move is aimed at strengthening payment security, improving transaction traceability, and aligning Nigeria’s payment infrastructure with international standards.
Why ISO 20022 and Geo-tagging Matter
Until now, POS transactions in Nigeria have relied on older messaging formats such as ISO 8583, which only transmit basic details like amount, card number, and merchant. ISO 20022 provides richer data, including payer and payee information, merchant identifiers, purpose codes, and Global Positioning System (GPS) coordinates.
According to the CBN, this change is expected to improve transaction consistency, enhance auditing, and make fraudulent activities more difficult. According to CSL Research, the adoption aligns Nigeria’s payment system with global SWIFT standards, which could lower integration costs and improve cross-border interoperability.
The geo-tagging requirement adds another layer of control. Each POS device must now be linked to a verified address, and moving a terminal more than 10 metres from its registered location will constitute a breach.
Impact on Merchants and Agents
The CBN’s directive effectively ends the practice of roaming POS agents. Merchants will now operate terminals from fixed locations. This may disrupt small businesses that rely on mobile operations in markets, events, or rural areas with limited access to traditional banking services.
Upgrading to dual-frequency GPS-enabled POS devices is also part of the policy. While some existing terminals can be reconfigured, many may require replacement. New smart POS devices currently cost between $40 and $80, a potential financial burden for smaller agents.
Addressing Fraud Concerns
Fraud has been a growing challenge in Nigeria’s digital payments sector. The Nigeria Inter-Bank Settlement System (NIBSS) reported that fraud-related losses rose to $28 million in the second quarter of 2024, up from $1.9 million in the first quarter. Mobile and POS channels accounted for a significant portion of these losses.
“Geo-tagging will provide traceability and make it harder for fraudsters to exploit POS devices,” said Mr. Babatunde Akin-Moses, CEO of fintech company Sycamore.
A Growing POS Market
Since their introduction in 2013, POS terminals have become the most widely used digital payment channel in Nigeria, surpassing automated teller machines (ATMs). By March 2025, there were 8.36 million registered terminals, with 5.9 million active – a 119% year-on-year increase. Transaction volumes in the first quarter of 2025 reached $7.4 billion, representing a 301% rise compared to the same period in 2024.
Implementation Challenges
Analysts have noted potential hurdles in implementing the new policy, including: Connectivity issues in rural areas; integration delays due to tight deadlines; higher costs for merchants and agents; and possible GPS accuracy limitations in enclosed or high-density urban spaces.
CSL Research recommends a phased approach, starting with high-volume merchants, along with financing support for small operators and remote software updates to ease compliance.
The CBN’s twin policy – migration to ISO 20022 and mandatory geo-tagging of POS devices – seeks to enhance fraud prevention, improve regulatory monitoring, and bring Nigeria’s payment ecosystem closer to international standards. However, the directive may also reshape the dynamics of retail payments, reducing mobility in a sector that has thrived on flexibility.
The October 31, 2025 deadline leaves less than two months for financial institutions, fintechs, and merchants to adapt.
