POS Agents Raise Alarm Over Fraud, Regulatory Gaps in Nigeria’s Fintech Sector
The Kwara Association of Professional Point of Sale Agents (KAPPSA) has expressed concern over persistent gaps in Nigeria’s financial technology system, warning that the shortcomings expose POS operators to fraud, liability, and systemic inefficiencies.
At a press briefing in Ilorin, KAPPSA said the country’s growing reliance on POS agents for financial inclusion is not matched by adequate regulatory protection, posing risks to both operators and the broader cashless economy.
One of the major challenges highlighted is the rise in fraudulent transactions involving stolen debit cards. While banks and ATMs face little scrutiny when such cards are used, POS agents are often criminalised, sometimes months after a transaction, when they are unable to produce the identity of customers. The association urged the Central Bank of Nigeria (CBN) to require fintech firms and banks to equip POS terminals with cameras and mandate identity verification for transactions above ₦50,000, using customer photographs and National Identification Numbers.
Electronic fraud remains a serious problem nationwide, with data from the Nigeria Inter-Bank Settlement System (NIBSS) showing losses exceeding ₦17 billion in 2023. With POS transaction volumes rising by more than 40 percent in the same year, operators have become prime targets for fraudsters.
KAPPSA also pointed to persistent disputes from failed transactions in which customers are debited but the POS terminals record no payment. Instead of banks resolving the errors, agents are frequently blamed and left to manage disputes with dissatisfied customers. The association called on the CBN to establish clearer dispute resolution frameworks, noting that in 2021 alone, the apex bank received more than 200,000 complaints linked to electronic payments, many involving POS transactions.
Beyond fraud and disputes, the association stressed the need for financial empowerment for POS operators, many of whom are young entrepreneurs working in underserved communities. It noted that agents often rely on high-interest informal loans, eroding earnings and stunting growth, and urged government and financial institutions to extend affordable credit facilities as part of broader economic development and financial inclusion strategies.
KAPPSA further condemned harmful practices within the sector, such as the reported use of charms in financial dealings, describing them as damaging to public trust. It called for collaboration between regulators, security agencies, and professional associations to root out such practices.
Nigeria’s fintech industry has expanded rapidly over the past decade, driven by firms such as OPay, Moniepoint, and Flutterwave. However, the concerns raised by KAPPSA highlight vulnerabilities at the last-mile level. Analysts caution that without stronger oversight, consumer and operator distrust could undermine the country’s drive toward a cashless economy and wider financial inclusion.
The association reaffirmed its readiness to work with regulators, banks, fintech companies, and law enforcement agencies to build a transparent, secure, and sustainable POS sector.
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