• Nigeria's CBN mandates single-principal exclusivity for POS agents, effective from April 2026, which will end the use of multiple terminals from various providers.

• The reforms impose strict transaction caps, geo-fence all POS terminals to a fixed location, and make principal financial institutions fully liable.

• While agent income may decline and the market consolidates, the ultimate goal is a safer, more professional system that delivers improved consumer protection.

The Central Bank of Nigeria (CBN) has introduced new Guidelines on Agent Banking Operations in Nigeria that will take effect on October 6, 2025. These guidelines represent one of the most significant regulatory shifts in the history of Nigeria’s agent banking sector, better known to the public as the POS or “money agent” business.

The End of the Multi-Terminal Era

At the center of the reform is the principle of single-principal exclusivity, a rule that prohibits agents from working with more than one financial institution. As of April 1, 2026, every agent must be affiliated with a single licensed bank or fintech. This measure is designed to bring order to a fast-growing but loosely regulated ecosystem that now processes trillions of naira annually, particularly since the 2023 cash scarcity crisis.

Agent banking has become the informal backbone of Nigeria’s financial inclusion drive. Across the country, millions of Nigerians rely on small shops, kiosks, and mobile vendors equipped with POS devices to withdraw cash, make transfers, pay bills, or even open accounts. These agents, often operating independently, have filled the gap left by traditional banks, especially in rural and peri-urban areas. Until now, it was common for an agent to handle two to four POS terminals from different providers such as OPay, Moniepoint, or PalmPay. This allowed them to spread risk, avoid network downtimes, and chase the best commission rates. Under the new rule, that flexibility is no longer available. Each agent will be required to select a single partner institution, operate from a designated location, and adhere to stricter transaction limits and reporting requirements.

The CBN’s rationale is straightforward. The multi-homing model made it difficult to track transactions, encouraged arbitrage, and created loopholes for fraud and money laundering. By enforcing exclusivity, the regulator aims to establish a clear audit trail, enhance consumer protection, and enhance oversight of what has become a crucial component of Nigeria’s payment infrastructure.

To ensure a smooth transition, the CBN has allowed an extended grace period until April 2026. During this time, banks and fintechs must re-contract their agents, geo-fence devices to fixed addresses, and delist those working across multiple platforms. After the deadline, any violation could lead to a three-year suspension of the agent’s BVN and fines of up to ten million naira for the principal institution.

Navigating the New Landscape

The new guidelines go far beyond exclusivity. They introduce stricter transaction caps to limit cash-based operations. Customers will be allowed a maximum of one hundred thousand naira in daily cash-in or cash-out transactions and five hundred thousand naira weekly. Each agent’s cumulative cash-out limit will be set at ₦ 1,000,000 per day. The CBN believes these caps will discourage excessive cash circulation, reduce opportunities for fraud, and support its broader cashless policy.

Additionally, every POS terminal must now be registered to a specific physical location, typically a kiosk or retail shop. The device will only function within a ten-metre radius of that registered point. Mobile or itinerant POS operations, once every day in markets and event grounds, will no longer be permitted. This requirement aims to eliminate “ghost agents” and enhance the transparency and traceability of transactions.

The reforms will also increase accountability. Principals—banks and fintechs—must submit detailed monthly reports covering transaction volumes, fraud cases, and customer complaints by the tenth of each month. Late or incomplete filings attract immediate penalties. More importantly, principals are now fully liable for the actions of their agents. This clause will compel them to implement stricter monitoring systems, invest in compliance tools, and provide enhanced training for agents to prevent costly sanctions.

The impact of these measures will ripple across the entire agent-banking ecosystem. For the street-level operators, who form the backbone of the industry, the transition will be painful. Many have built their income on multi-terminal flexibility, earning commissions from several providers to maintain a steady cash flow.

Once confined to a single principal, their average revenue could fall by as much as 30 to 40 percent. They will also face new costs for business registration, kiosk setup, and compliance training. Yet, there are potential benefits. With exclusivity, agents can expect better institutional support, including technical assistance, insurance coverage, and loyalty rewards. Over time, the market may favor fewer but more professional agents, while informal, umbrella-based setups gradually disappear.

Consolidations Looming Ahead

Super-agents—the aggregators managing networks of smaller agents—will face consolidation pressure. The requirement to operate at least fifty agents across Nigeria’s six geopolitical zones will squeeze out smaller players and push the sector toward mergers and acquisitions. Large networks with hundreds of agents are likely to strengthen their dominance, benefiting from scale and better access to capital. Deposit money banks, meanwhile, will see costs rise as they assume greater responsibility for agent conduct and compliance.

They are expected to compete aggressively for exclusive networks by offering free POS devices, higher commissions, and liquidity incentives. Fintechs that grew rapidly under the old, open model will find the adjustment harder. Those with strong balance sheets and technological infrastructure may adapt by offering data analytics, credit, and value-added services. Others may struggle to stay afloat or be forced into partnerships with larger institutions.

For consumers, the transition will bring mixed outcomes. In the short term, the number of agents could decline, queues may lengthen, and service fees could rise, especially in rural communities. However, in the longer term, the system should become safer and more reliable. Each transaction will be traceable, receipts will include location data, and customers will experience improved complaint resolution. Fraud, one of the sector’s major headaches, is likely to decline significantly. The formalization of the agent network will also attract new investment, both domestic and foreign, as confidence in the sector grows.

Idriss Linge