The Association of Point of Sale Service Providers (POS) has issued a warning that it plans to shut down operations nationwide, a move that could potentially disrupt banking and e-payment services relied on by millions of Nigerians. The group warned it could suspend Verve card transaction processing, citing alleged monopolistic practices.
Background of the Dispute
The Association stated that its activities may be shut down throughout the nation should the Central Bank of Nigeria (CBN) and the Federal Competition and Consumer Protection Commission (FCCPC) fail to immediately intervene in the alleged exclusivity practice by two companies. The Association stated that it had submitted an official complaint on its website and to regulators concerning the unlawful, constant decisions from the two companies, which, the group says, were violating regulatory laws in their operation.
Official Statement
The Association disclosed in a statement signed by Yomi Idowu, Communications Consultant to the Association. According to Idowu, the POS operators have written a letter to protest the alleged persistent unlawful decisions of the two companies, noting that their actions negate extant rules and regulations of the Central Bank of Nigeria and the Federal Competition and Consumer Protection Act, 2018, as reported by The Guardian.
The Association of POS Service Providers emphasised that as representatives of a coalition comprising several Central Bank of Nigeria Licensed payment acceptors, acquirers, processors, and switches, they would have no option but to suspend acceptance, acquiring, processing, and switching of Verve Card transactions. The Point of Sales Association in the letter was quoted as saying: "This decision has become unavoidable because of the continued and increasing illegal actions of the firms which the Association claims have the effect of compromising the integrity of Nigeria's payments ecosystem, eroding the capital base of participating institutions, and breaching multiple regulatory requirements."
Four Key Issues Highlighted by POS Operators
The POS operators outlined four main grievances:
- Exclusive Monopoly: Maintaining an exclusive monopoly over the processing of Verve card transactions, which the association says restricts competition within Nigeria's payment ecosystem.
- Abuse of Dominant Position: Abuse of a dominant position in the domestic card scheme market, allegedly in violation of the Federal Competition and Consumer Protection Act 2018 and CBN Guidelines on the Operation of Electronic Payment Channels.
- Excessive Fees: Charging scheme fees above the acquirer's share of the regulated Merchant Service Commission, contrary to applicable CBN regulations, according to the association.
- Unauthorized Debits: Carrying out alleged illegal and unauthorized debits on settlement accounts belonging to acquirers, processors, and switches without proper approval.
The association noted that other card scheme operators have already removed exclusivity arrangements in line with CBN regulations, making the alleged practices an exception within the industry.
Relief as CBN Announces Plan for Bank Charges
Earlier, Legit.ng reported that Nigerians may soon enjoy relief from multiple debit alerts as the Central Bank of Nigeria announced plans to review transaction-related fees imposed by commercial banks. The decision followed a rise in complaints from bank customers about confusing debit alerts and multiple deductions. One key issue being examined is the multiplicity of bank alerts sent to customers.
