Point of Sale providers to halt operations in protest of restrictive contract terms

The Association of Point of Sale Service Providers may be forced to suspend and severely impact banking operations nationwide if The Central Bank of Nigeria and the FCCPC do not step in immediately to address the alleged exclusivity practice by two companies.

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This warning was issued in a statement signed by Yomi Idowu, the Communications Consultant to the Association, who outlined the grievances of the POS operators.

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According to Idowu, the POS operators have penned a letter to protest the alleged persistent unlawful decisions of the two companies, which they claim contravene the extant rules and regulations of the Central Bank of Nigeria and the Federal Competition and Consumer Protection Act of 2018.

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The Association of POS Service Providers, representing a coalition of Central Bank of Nigeria-licensed payment acceptors, acquirers, processors, and switches, stated that they would have no choice but to suspend the acceptance, acquiring, processing, and switching of Verve Card transactions.

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The decision to suspend these services has become unavoidable due to the persistent and escalating unlawful conduct of the two companies, which the Association claims undermines the integrity of Nigeria's payments ecosystem, erodes the capital base of participating institutions, and violates several regulatory requirements.

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The Association highlighted specific breaches, including the maintenance of an exclusive monopoly over Verve transaction processing, abuse of dominant position in the domestic card scheme market, and imposition of scheme fees in excess of the regulated Merchant Service Commission share.

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Additional breaches mentioned include unauthorized and unlawful debits from the settlement accounts of acquirers, processors, and switches, all of which contravene sections of the Federal Competition and Consumer Protection Act 2018 and the CBN Guidelines on Operation of Electronic Payment Channels.

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Mr. Idowu noted that, ironically, other card scheme operators have abolished all forms of exclusivity in compliance with CBN regulations, highlighting the outliers in the industry.