The Corporate Affairs Commission (CAC) has disclosed that about 100,000 Point of Sale (PoS) operators have officially registered their businesses with the commission under its PoS formalization project. The number is a shortfall of the 250,000 registrations expected from the initiative.
Speaking on Monday, the Registrar-General of the Corporate Affairs Commission, Hussaini Magaji during an In-House Enforcement and Compliance Training for state offices on Monday in Abuja, expressed concerns about the huge difference in the registration project that was launched on July 7, 2024, and concluded on September 5, 2024.
“The commission has to date registered about 100,000 POS operators under the POS formalization project. This is a far cry from the 250,000 expected from that sector alone. Apart from the Fintech sector, it is estimated that about 40 million micro, small, and medium enterprises are operating in the economy. A realistic objective is to get 50 per cent formalization of this figure,” Magaji expressed.
He said that while some fintechs recognized and appreciated the transformative nature of modern business within the formal documentation as an essential first step, others showed negative actions that proved they were fixated on the obsolete process.
“While the visionary Fintechs mentioned above and their operators appreciated the transformative nature of modern business which requires formal documentation as an essential first step, others with archaic mentally became fixated on the old and obsolete informal mode of business operations sometimes with cash kept under a pillow or in jute bags,” he noted.
Under the PoS Formalization Project, PoS Operators were required to register a minimum of Business Name in line with the requirements of section 863 (1) of CAMA which requires prior registration before commencement of business or at most within 28 days of commencement for Business Names.
According to the CAC, the initiative aims to reduce fraud within the system, as well as combat kidnapping and the payment of ransoms. Data from the Nigeria Inter-Bank Settlement System reveals that there are over 1.9 million PoS terminals deployed by merchants and individuals nationwide.
The commission’s boss stated further that CAC is working with other regulators to develop adequate sanctions or responses to operators who fail to adhere to the mandatory registration.
He added that “there is however a window for regularization between now and when the regulatory hammer will be brought on them. We are to also clarify that multiple registration is not required across each Fintech for each POS operator.”
Stating the dangers of performing transactions with unregistered PoS operators, he noted that such a business could be an agent of fraud that can quit business without any trace. He pointed out that formalization is the first step for the legitimate commencement of modern business.
“The risk of engaging in business transactions with unregistered businesses is very high. Such business is not only susceptible to disappearance into thin air without trace but also serves as an easy vehicle for money laundering and terrorism financing. Unregistered businesses also cannot access government interventions in any sector,” he warned.
AI integration in PoS registration
In a bid to enhance its operation, the Corporate Affairs Commission (CAC) said it is exploring the integration of Artificial Intelligence to handle routine operations such as registration and name reservation.
Magaji highlighted that the introduction of AI could make humans focus on more advanced tasks that require activities beyond the capability of technology.
“Emphasis on compliance enforcement has become more imperative now because of the growing realization that Artificial Intelligence could be deployed to perform routine operational tasks such as name reservation and even registration. This frees time and human resources that could be deployed to perform other tasks that require some measure of discretion usually inappropriate for computers or machines,” he noted.
In addition, he mentioned ongoing plans in the commission to reorganize its organogram structure and replace it with a new one aimed at creating more opportunities that align with international modalities. He further stated that the new structure is in place and will be implemented upon approval by the necessary authorities.
Meanwhile, the exercise of PoS in Nigeria has been in fine form in terms of revenue generation for the federal government following the introduction of the Electronic Money Transfer Levy (EMTL) on fintechs. Its revenue on the levy surged to N31.2 billion in December 2024, making it the highest of any month.
The record, contained in revenue-sharing data released by the Federation Account Allocation Committee (FAAC), explained that the December revenue surpassed the N15.046 billion recorded in November by 107 per cent. This increase was spurred by the inclusion of financial technology platforms like Opay, Kuda, Moniepoint, and others into the tax net.
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