The Central Bank of Nigeria (CBN) has directed all Point of Sale (PoS) operators and payment service providers to establish dual connectivity with the Nigeria Inter-Bank Settlement System (NIBSS) and Unified Payment Services Limited (UPSL) within 30 days, in a bid to curb persistent transaction failures across the payment system.

The directive is contained in a circular titled PSS/DIR/PUB/CIR/001/002, signed by the Director of the Payments System Supervision Department, Mrs Rakiya Yusuf. It applies to all acquirers, processors, payment terminal service aggregators and providers operating in Nigeria.

According to the apex bank, the policy builds on its September 2024 decision to end reliance on single transaction routing channels, which it said has contributed significantly to recurring service disruptions within the country’s cashless payment ecosystem.

Under the new framework, all PoS operators are required to maintain active connections with both licensed payment terminal service aggregators—NIBSS and UPSL—and configure their systems to support automatic failover. This will ensure seamless transaction switching whenever one channel experiences downtime.

The CBN explained that the measure is aimed at reducing frequent transaction failures that negatively impact merchants, consumers and businesses, particularly in the retail and informal sectors where PoS terminals remain a primary means of payment.

To strengthen system resilience and enforce compliance, NIBSS and UPSL have been mandated to conduct regular system tests with financial institutions and submit reports of the outcomes to the CBN. The two switching companies are also required to provide real-time notifications to banks during system outages and submit detailed incident reports to the Payments System Supervision Department within 24 hours, outlining the causes of failures and corrective actions taken.

The 30-day compliance window, which runs until mid-January 2026, places significant pressure on an industry that processes millions of transactions daily as Nigeria accelerates its transition to digital financial services.

PoS transaction failures have remained a persistent challenge despite previous regulatory interventions by the CBN, including the introduction of geo-tagging requirements in August. While industry stakeholders have broadly welcomed the dual-connectivity mandate as a critical step toward stabilising payment infrastructure, some operators have expressed concerns over integration costs and the tight implementation timeline.

Analysts say the directive could significantly improve transaction success rates and restore confidence in electronic payments, although smaller payment terminal service providers may face operational and financial hurdles in meeting the deadline. (Nigerian Tribune)

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