A total of 346, 438 Point of Sale (PoS) terminals were deployed in the country between 2016 and 2020, compared with the 558, 231 that were registered during the period, findings by New Telegraph show. According to latest data released by the Nigeria Interbank Settlement System (NIBSS), the total number of PoS terminals deployed in the country stood at 459,285 as at the end of December last year, compared with 112,847 at the end of 2016. The figures also show that there was a total number of 690,070 registered terminals in the country at the end of December 2020 compared with 131,839 at the end of 2016.
This means that the total number of deployed and registered terminals in the last five years amounted to 346, 438 and 558, 231 respectively. It also means that 211, 793 registered terminals are yet to be deployed. The Central Bank of Nigeria’s (CBN) guidelines state that only institutions licensed by the apex bank to serve as merchant acquirers, can own PoS terminals, “but shall only deploy and support POS terminals through a CBN licensed Payment Terminal Services Provider (PTSP).”
The guidelines, however, state that the CBN can grant exceptions where PTSP services are not available. Further analysis of the NIBSS’ data indicates that there has been a steady increase in the number of deployed and registered PoS terminals in the country in the last five years. For instance, the number of the electronic tools that were deployed and registered rose from 112, 847 and 131, 839 respectively in 2016 to 155, 462 and 182, 806 in 2017. It further increased to 217, 283 and 258,443 in 2018; surged to 303,162 and 446, 453 in 2019 and then jumped to 459, 285 and 690,070 in 2020.
In its bid to boost financial inclusion by increasing access to financial services, the CBN introduced the agent banking system in 2013, under which, financial institutions and mobile money operators could appoint third parties as agents, equipped with PoS terminals to provide financial services on their behalf to members of the public.
Commonly called PoS operators in these parts, the banking agents have seen their business grow rapidly since the coronavirus (Covid- 19) pandemic spread to Nigeria in February last year. New Telegraph reported last year that with the pandemic forcing lenders to adopt Nigeria Centre for Disease Control (NCDC)- ordered Covid-19 protocols, such as social distancing and avoiding crowded environments, many DMBs saw an opportunity to boost their agent banking business.
Specifically, a national daily reported in August last year that three first tier lenders -First Bank of Nigeria Ltd, Zenith Bank and Access Bank-had placed orders for a total of 100,000 PoS terminals for their agent banking business. According to the report, First Bank, which leads the industry in number of terminals, had ordered another 40,000; Zenith Bank ordered 50,000 while Access Bank ordered 10,000. Apart from Covid-19 restrictions, the rapid growth in agent banking business in recent months was also fuelled by the #EndSARS crisis, which shook the country in October and November last year.
The crisis escalated on October 20, when security forces in Lagos opened fire on unarmed protesters at the Lekki Toll gate, who had been staging a sit-in for about two weeks, calling for the dissolution of the Special Anti-Robbery Squad (SARS), a notorious police unit that had long been accused of extortion, torture and extrajudicial killings. Thies led to hoodlums engaging in a looting spree and wreaking massive destruction on public and private property, including lenders’ infrastructure across the country.
In order to address the wanton lawlessness, many state governors imposed full curfew across their states, forcing commercial banks to announce a temporarily shut down of their branches and their Automated Teller Machines (ATMs) galleria. New Telegraph’s findings showed that in the wake of the riots, many bank customers, who could not make cash withdrawals, had to resort to patronising banking agents (PoS operators). It will be recalled that as part of efforts to achieve its target of 80 per cent financial inclusion by the end of last year, the CBN, in collaboration with deposit money banks and licensed mobile money operators, had in March 2018, unveiled an initiative known as the Shared Agent Network Expansion Facilities (SANEF).
Under the initiative, the financial institutions planned an aggressive roll out of 500,000 agent network to offer basic financial services, such as cash-in, cash-out, fund transfer, bill payments, airtime purchase, government disbursements as well as remote enrolment on BMS infrastructure (BVN) to an estimated 50 million Nigerians. Speaking at the event, the Chairman, Body of Banks’ Chief Executive Officers, and Managing Director/Chief Executive Officer, Access Bank Plc, Mr. Herbert Wigwe, said: “This agreement reflects our commitment to aggressively pursue the CBN 2020 Financial Inclusion target in an integrated way with minimal systemic risk to the financial system. This initiative will also generate 500,000 new jobs over the next two years.”