The Central Bank of Nigeria (CBN) has introduced new transaction limits for contactless payments in the country, effective June 27, 2023. These guidelines, outlined in the CBN’s document titled “Guidelines on Contactless Payments in Nigeria,” specify that contactless payments made through accounts or wallets in Nigeria will be limited to N15,000 per transaction and a daily cumulative limit of N50,000.
Under the new regulations, customers can conveniently make contactless payments up to N15,000 per transaction and up to N50,000 per day without the need to enter their personal identification number (PIN) or undergo biometric verification.
The circular, signed by Musa Jimoh, Director of the Payment Systems Management Department of the CBN, stated that the apex bank developed these guidelines to standardize operations in the payment system, promote the adoption of innovative products, and ensure the stability of the financial system.
It read, “The Central Bank of Nigeria, in furtherance of its efforts to standardize operations in the payments system, while encouraging the deployment of innovative products and sustaining the financial system stability, developed the Guidelines for Contactless Payments in Nigeria.
Contactless payments, which facilitate transactions without physical contact between the payer and the acquiring device, have been recognized as an innovative payment option suitable for low-value and high-volume transactions. Various companies and services in Nigeria, including banks, mobile payment providers, e-commerce platforms, transportation services, and contactless payment apps, offer contactless payment options, contributing to the growing adoption of this payment method in the country.
“Contactless payment, which involves the consummation of financial transactions without physical contact between the payer and the acquiring devices, has been identified as an innovative payment option for safe and efficient conduct of low- value and large-volume payments.
“The Guidelines was conceived to ensure that participants in contactless payments implement appropriate risk management processes and measures while keeping to best relevant standards.”
Read more: The ‘crack’ in CBN’s social media handle requirement for KYC
Why the CBN is placing limits to contactless payments
With limits now set on contactless payments, the CBN aims to ensure that participants in contactless payment implement adequate risk management processes and adhere to relevant standards.
The move is also aimed at enhancing the security and convenience of contactless payments, which use technologies such as Near Field Communication (NFC) and Quick Response (QR) codes to enable customers to pay without physical contact with the merchant or the payment terminal.
However, for contactless payments exceeding the prescribed limits, customers will be required to provide additional verification and authorization, such as their PIN or biometric data. The CBN emphasized that for such transactions, the existing Know Your Customer (KYC) requirements and limits on electronic payment channels will remain applicable.
In instances where contactless payments exceed the daily cumulative limit of N50,000, customers will be required to utilize contact-based technology such as inserting or swiping their cards on the payment terminal.
The CBN emphasized that these new transaction limits align with its mandate to promote a secure and efficient payment system in Nigeria while safeguarding the interests of consumers and other stakeholders in the industry.
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