PoS Operators Set to Take CAC to Court

Point of Sale (PoS) operators, represented by the National President of the Association of Mobile Money and Bank Agents in Nigeria, are gearing up for a legal battle to challenge the requirement imposed by the Corporate Affairs Commission (CAC) for mandatory registration.

Fasasi Sarafadeen, the association’s President, criticized the directive, arguing that it contradicts the Companies and Allied Matters Act, 2004, which stipulates that the CAC has no authority over individuals operating without forming a company.

Sarafadeen emphasized, “We shall challenge it legally. The court will have to intervene in the interpretation of the quoted section of the CAMA if individuals operating as a sub-agent (likened to a bank branch) must register with CAC.” He clarified that while the Central Bank of Nigeria’s memo applies to non-individual entities, the CAC’s directive unfairly targets individual PoS agents, ignoring this distinction.

He further explained the categorization of PoS agents into two groups: individual and non-individual agents. Individual agents operate under their names and are profiled with financial institutions accordingly, while non-individual agents operate under registered or unregistered business names. Sarafadeen stressed that it’s the latter category that falls under the CAC’s jurisdiction for registration, as they are required to register their business names as per the law.

Regarding sub-agents, Sarafadeen clarified that they are independent branches of registered companies and shouldn’t be labeled as illegal. He urged the CAC to prioritize addressing the high failure rate of registered businesses in Nigeria rather than enforcing regulations on individual PoS agents.

He pointed out, “The Corporate Affairs Commission should prioritize addressing the alarming failure rate of registered businesses in Nigeria, rather than targeting sub-agents.” Sarafadeen highlighted the significant job creation potential of agent banking and called for government intervention to protect these jobs, aligning with President Bola Tinubu’s Hope agenda, which opposes policies causing unemployment.

The recent directive by the Federal Government, through the CAC, requiring PoS companies to register their agents, merchants, and individuals within a two-month deadline, was met with resistance from PoS operators. The move aimed to curb fraud and enhance security in PoS transactions, amidst concerns over fraud incidents involving PoS terminals and cryptocurrency trading.