Regulatory Alerts2015-12-01 | BPS/DIR/GEN/CIR/01/006CIRCULAR ON CONPLIANCE WITH DUE DILIGENCE IN THE DEPLOYMENT OF POINT OF SALE (POS) TERMINALS
The Central Bank of Nigeria has issued a circular to Deposit Money Banks (DMBs) regarding due diligence in the deployment of Point-of-Sale (POS) terminals. They have observed that banks deploy POS terminals without conducting proper Know Your Customer (KYC) checks on merchants, which they view as unethical and unacceptable. To reduce fraudulent activities, DMBs are mandated to: 1. Conduct KYC on all their merchants with POS. 2. Set merchant limits based on the volume of business/commercial activities. 3. Set customer limits based on card class. 4. Merchants must enforce cardholder's identification for transactions above a specific limit, as agreed between the bank and the merchant. 5. Failure to comply will result in appropriate sanctions.
CENTRAL BANK OF NIGERIA Central Business District P.M.B. 0187 Garki, Abuja 09-46238455 (Fax) 09-46238445 Tel REF: BPS/DIR/GEN/CIR/01/006 October 19, 2010 TO: ALL DEPOSIT MONEY BANKS (DMBS) CIRCULAR ON COMPLIANCE WITH DUE DILIGENCE IN THE DEPLOYMENT OF POINT OF SALE (POS) TERMINALS It has come to our notice that Deposit Money Banks deploy Point-of-Sale (POS) terminals to their merchants without conducting due diligence on the merchants. The Central Bank of Nigeria (CBN) views this as unethical and therefore, unacceptable. This is because of the possibility of using the POS as a point of compromising card details of customers.
To reduce the occurrence of fraud on POS transactions, therefore, DMBs are hereby mandated to observe the following for existing and new merchants: o o .
Conduct proper KYC on all their merchants with POS Set merchant limits based on the volume of business/commercial activities Set customer limit based on card class .
Instruct merchants to enforce cardholder's identification at the point of payment for transactions above a specific limit as agreed between the bank and the merchant.
Please note that appropriate sanctions will be imposed for non-compliance. A. S. ATOLOYE Director, Banking & Payments System Department