On August 26, 2025, the Central Bank of Nigeria, CBN, issued a pivotal directive mandating that all banks and licensed operators, such as Opay, Moniepoint, and Palmpay and others, geo-tag their Point of Sale, PoS, machines within 60 days. This measure, set to enforce compliance by October 20, 2025, aims to restrict PoS usage to registered locations, addressing a surge in fraud that has plagued Nigeria’s digital payment landscape.

The necessity for this directive cannot be overstated, given the rampant crimes associated with PoS operations. Nigeria’s electronic payments have boomed, hitting N223 trillion in Q1 2024, but so has fraud, with PoS-related incidents spiking 31 per cent from 2,683 in Q4 2023 to 3,518 in Q1 2024.

Common frauds include card skimming, where criminals use devices to steal card data during transactions; transaction reversals, manipulating systems to undo legitimate payments; and account takeovers via phishing or malware. Refund fraud sees scammers request bogus returns, while “triangle scams” involve intermediaries diverting funds.

Payment alert scams deceive users with fake confirmations, and device tampering alters PoS hardware to siphon money. These crimes impose great distress on victims, erode trust and fuel money laundering.

Geo-tagging prevents such frauds by embedding GPS coordinates into PoS terminals, ensuring they operate only within a 10-meter radius of registered sites. If a machine is moved or used elsewhere, it automatically shuts down, halting unauthorised transactions in real-time. This curbs the mobility of fraudulent devices, making it harder for criminals to exploit them across locations.

Criminals often clone PoS machines by acquiring legitimate terminals through illicit means, reprogramming software to mimic authentic ones, or hacking into systems to duplicate serial numbers and credentials. “Ghost terminals” refer to unregistered or fabricated devices that appear operational but are used to manipulate transactions, diverting funds to scammers’ accounts without trace.

These clones enable “sweetheart deals” or insider fraud, where operators collude to under-report sales or issue unauthorised discounts. Geo-tagging exposes these by tying each terminal to a verifiable location, flagging anomalies instantly.

Beyond fraud prevention, three key benefits emerge. First, enhanced regulatory oversight allows the CBN to monitor transaction patterns, aiding in economic data collection for sound policy-making. Second, it boosts customer confidence, encouraging wider adoption of cashless payments amid Nigeria’s fintech growth. Third, it reduces operational risks for operators, minimising disputes and charge-backs that strain businesses.

Operators who fail to comply face severe consequences: automatic deactivation of non-geo-tagged PoS machines, barring them from processing payments and potentially leading to business shut-downs or fines.

We commend the CBN for this forward-thinking initiative, which modernises Nigeria’s payment system and aligns with global standards like ISO 20022. By curbing fraud hotspots, it will clean up PoS transactions, foster transparency in cash operations, and strengthen the overall financial ecosystem, ultimately benefiting merchants, consumers and the economy at large.