Since the Point of Sales, PoS, terminals emerged as major payment platform in Nigeria’s trade and finance environment about five years ago, some criminal usage of the platform has also emerged.Vanguard MoneyDigest investigations have revealed that criminals and armed robbers now have significant number of PoS deployment in their network. The investigations also reveal that this network is fed by some illegal PoS merchants stealing terminals from accredited dealers. Armed robbers now go about major cities with PoS machines forcing their victims to effect cash transfers to designated accounts. However, a source in one of the major dealers told Vanguard MoneyDigest that collusion or insider abuse amongst some accredited dealers cannot be ruled out. The source also added that some banks do not follow proper assessment of individuals who want to acquire PoS terminal, hence some end up in wrong hands. A tier one bank customer service manager who spoke on condition of anonymity to Vanguard MoneyDigestsaid: “There are gaps in the banking system which fraudsters take advantage of to rob unsuspecting individuals. illegal PoS operators can get a terminal in two ways. One is that they may steal it from petty traders who are now seen having PoS terminals. When such terminal is stolen the thief can send a mail to the bank that he has opened a new account which should be linked to the PoS machine. “Also, they can disguise as merchants and forge documents knowing that some banks are negligent in the thorough assessment of customers. A bank should be able to visit the said business location to verify if it exists or if it is legal or illegal before giving out the PoS machine.” Commenting on the development, President Bank Customers Association of Nigeria, BCAN, Dr. Uju Ogubunka, said : “You cannot get a PoS independently, it has to pass through a system. An illegal PoS machine operator can either be attached to a person who have the license and approval. “Clamping down illegal PoS operators will reduce fraud. If you know that this is the source of a problem and you close that source, that problem cease unless those guys go and device another means. Today, they may be using PoS, but if you clampdown on it, they will run away from PoS and start using another thing. “The act should not be restricted to those who have the equipment illegally. Both the legal and illegal operators should be investigated and wherever it is found, they should deal with it as the law permits.” On his part, Comrade Prince Ichie, President Association of Micro Enterprises in Nigeria(AMEN) stated: “We are aware the regulators are concerned about this illegal act. Many innocent Nigerians have fallen victims of this illegal PoS machines. Many people have lost millions of naira courtesy of these illegal PoS operators. Those operators using the PoS which is not acquired legally for businesses should make it a task to approach any of the bank and do what is right.” PoS acquisition process You will have a business current account or corporate account or savings account with the bank where you want to get the PoS machine from. You then need to go to your branch or speak to your account officer. You should get a specific PoS request form as well as an agreement document to sign. Following all checks and approval of the account, you should receive your PoS in a week or two depending on the bank, delivered to your business address. Please note that PoS terminals are given free of charge, however for each payment you accept, a fee ranging from 0.25 percent to 1.5 percent, depending on the bank, is deducted for the services provided which includes routine free maintenance of the units. EFCC laments situation The acting EFCC Chairman, Ibrahim Magu, represented by Makurdi Zonal Head of the Economic and Financial Crimes Commission, EFCC, Johnson Babalola, in an interactive session with Regional Bank Managers, said: “We are having serious challenges with the banks giving PoS machines to individuals with questionable characters and without proper documentation.” How we got into PoS PoS, terminals were introduced in Nigeria to meet the Central Bank of Nigeria’s, targets on cashless policy, an initiative to reduce the amount of physical cash in circulation. It was designed to encourage the use of electronic platforms for settlements or payment for goods and services. To this effect, the CBN created the PoS guidelines released on August 2011 which stated: “PoS terminal owners should include: banks, merchants, acquirers, Payment Terminal Service Aggregator (PTSA) , and Payment Terminal Service Providers (PTSPs).” The guideline further stated: “ On roles and responsibilities of Merchant Acquirers, only CBN licensed financial and non- financial institutions shall serve as Merchant Acquirers; Merchant Acquirers can own PoS Terminals, but shall only deploy and support PoS terminals through a CBN licensed Payment Terminal Services Provider (PTSP); Merchant Acquirers shall ensure that PoS terminals purchased and deployed at merchant/retailer locations through CBN licensed Payment Terminal Services Provider shall accept all cards (card agnostic). Recently, the Economic and Financial Crimes Commission, EFCC, said it will start to clampdown on the fraudulent use of Point of Sale, PoS machines in the country
Source: https://www.vanguardngr.com/2019/07/illegal-pos-operators-on-the-prowl/