PoS Operators Threaten Legal Action Against CAC
Point of Sale (PoS) operators, represented by the National President of the Association of Mobile Money and Bank Agents in Nigeria, have announced plans to take the Corporate Affairs Commission (CAC) to court over the legality of its directive mandating registration for its members.
Fasasi Sarafadeen, the President of the association, criticized the directive, stating that it contravenes the Companies and Allied Matters Act (CAMA) of 2004. According to Sarafadeen, the law explicitly states that the CAC has no jurisdiction over individuals not operating as a company.
Sarafadeen highlighted the distinction between individual PoS agents operating under their names and non-individual agents operating under registered or unregistered business names. He clarified that the CAC’s directive only applies to the latter category, as they are required by law to register their business names.
He emphasized that sub-agents are independent branches of registered companies and should not be targeted by the CAC for registration. Sarafadeen called for a focus on addressing the high failure rate of registered businesses in Nigeria instead of enforcing regulations on individual PoS agents.
The directive from the CAC comes amidst concerns over fraud incidents involving PoS terminals and plans by the Central Bank of Nigeria (CBN) to regulate cryptocurrency trading. PoS terminals accounted for a significant percentage of fraud incidents in 2023, according to reports from the Nigeria Inter-Bank Settlement System Plc.
The CBN recently instructed major fintech firms to warn their customers against trading in cryptocurrency and froze numerous bank accounts allegedly involved in illegal foreign exchange transactions. This move has raised concerns about money laundering and terrorism financing, leading to increased scrutiny of fintech companies.
As PoS operators gear up for legal action against the CAC, the dispute underscores broader tensions surrounding financial regulation and the role of emerging technologies in Nigeria’s financial landscape.
