Abuja, September 5, 2024 – The Association of Mobile Money and Bank Agents in Nigeria (AMMBAN) has initiated legal action against the Corporate Affairs Commission (CAC) over its directive requiring Point of Sale (PoS) operators to register their businesses. The deadline for registration ended on Thursday, September 5, 2024, sparking widespread concern among PoS agents.
AMMBAN is contesting the CAC’s directive in court, arguing that the registration mandate is not only unfair but also detrimental to the small-scale businesses of its members. National General Secretary of AMMBAN, Oluwasegun Elegbede, confirmed this legal move in an interview with The PUNCH, stating that the CAC’s directive violates the Companies and Allied Matters Act (CAMA) 2004. According to Elegbede, section 863(1) of the Act clearly indicates that CAC has no jurisdiction over individuals who are not operating as companies.
“The order to enforce the CAC directive on individual PoS agents operating under their names is wrong and will be challenged. This directive contravenes CAMA, which explicitly states that CAC has no jurisdiction over individuals not operating as a company,” Elegbede explained.
The association has raised concerns over the financial burden that the registration poses for small-scale PoS agents. The cost of registration, which amounts to ₦35,000, is a significant challenge for many of their members, some of whom struggle to raise even that amount as capital. “These are young people trying to make a living for themselves. Imposing ₦35,000 on them could potentially cripple the operations of many small-scale agents across the country,” he added.
AMMBAN has also pushed back against the argument that CAC registration would help fight fraud. Elegbede emphasized that the association, in collaboration with law enforcement agencies, has already been working to curb fraud in the PoS industry. He pointed out that each PoS operator is traceable through their Bank Verification Number (BVN) and National Identification Number (NIN), making the registration redundant in terms of tracking criminal activities.
“We can trace PoS operators through NIBSS [Nigeria Inter-Bank Settlement System]. Every operator has a SIM card and a BVN/NIN, so there is no hiding place for anyone involved in fraud,” Elegbede argued.
National Vice President of AMMBAN, Dr. Obioha Oti, echoed these sentiments, describing CAC’s September 5 deadline as “null and void.” He insisted that the commission does not have the authority to enforce such a directive, further stating, “They cannot do anything.”
The CAC’s registration requirement stems from efforts to curb fraud, kidnapping, and ransom payments that often involve PoS terminals. According to a 2023 report by NIBSS, PoS terminals accounted for 26.37% of fraud incidents in Nigeria. The Federal Government, through CAC and in line with Central Bank of Nigeria (CBN) directives, had mandated the registration as part of measures to increase transparency in the system.
AMMBAN, however, contends that while regulations are necessary, they must not stifle the growth of the PoS sector, particularly given the role of mobile money agents in driving financial inclusion in rural areas where traditional banking services are limited.
As the case moves to court, all eyes will be on the legal interpretation of the CAMA Act and whether CAC’s directive will stand in its current form.
