The Central Bank of Nigeria (CBN) has issued a directive targeting key players in the electronic payments ecosystem—acquirers, processors, payment terminal service aggregators (PTSAs), and service providers—as part of efforts to curb persistent transaction failures and strengthen the reliability of Point-of-Sale (PoS) and digital payments.
The 30-day ultimatum underscores how interconnected these entities are in routing, authorising, and settling card and digital transactions across the country.
Who Are the Key Players?
Acquirers (Acquiring Banks):
These are banks that sign up merchants to accept card and electronic payments. They manage merchant accounts, handle transaction risk, and liaise with customers’ issuing banks to authorise payments.
Processors:
Processors provide the technical backbone of payments. They handle transaction switching, authorisation, clearing, and settlement, connecting acquirers to card schemes such as Visa and Mastercard, as well as local schemes.
Payment Terminal Service Aggregators (PTSAs):
In Nigeria, licensed PTSAs such as the Nigeria Inter-Bank Settlement System (NIBSS) and Unified Payment Services Limited (UPSL) manage central connectivity and certification for PoS terminals. They ensure terminals meet regulatory and technical standards and route transactions to the appropriate processors.
Payment Service Providers (PSPs) / Payment Aggregators:
These are third-party companies that offer merchants integrated payment solutions, bundling gateways, processing, and settlement under one platform. They simplify payment acceptance for businesses, especially online merchants.
Payment Terminal Service Providers (PTSPs):
PTSPs supply, deploy, and maintain PoS devices used by merchants. They ensure terminals are properly configured to connect through PTSAs and acquirers.
How a Typical PoS Transaction Works
- A customer initiates a card payment at a merchant’s PoS terminal.
- The terminal, supplied by a PTSP, routes the transaction through a licensed PTSA.
- The PTSA forwards the transaction to the designated processor.
- The acquirer seeks authorisation from the customer’s issuing bank.
- Once approved, funds are settled to the merchant. In many cases, a PSP manages this entire chain on behalf of the merchant.
Why the CBN Is Intervening
By explicitly addressing acquirers, processors, PTSAs, and service providers, the CBN aims to improve system resilience, reduce failed transactions, and ensure accountability across the payment value chain. The regulator has stressed that compliance by all parties is essential to maintaining consumer confidence and supporting Nigeria’s growing cashless economy.
The directive signals a tighter regulatory focus on collaboration, redundancy, and operational efficiency within the country’s payments infrastructure.