CBN Restricts POS Agents to One Bank Under New Regulatory Framework

The Central Bank of Nigeria (CBN)  has introduced sweeping new regulations for the country’s Point-of-Sale (POS) and agent banking sector, announced on October 6, 2025. One of the most notable aspects of the new guidelines is the introduction of the exclusivity rule, which mandates that all POS agents and banking operators must now affiliate with only one principal institution. This means each agent can operate under just one commercial bank, microfinance institution, payment service bank, or mobile money operator. According to Startup Researcher, agents currently working with multiple fintechs or banks such as Moniepoint, OPay, and PalmPay must choose a single financial partner by April 1, 2026, when the exclusivity rule officially takes effect. The CBN stated that the move is aimed at improving traceability, reducing oversight gaps, curbing fraud, and simplifying regulation in the fast-growing agent network. The exclusivity rule therefore stands as a central pillar of the CBN’s new regulatory framework.

The CBN’s decision to implement exclusivity is rooted in several core motivations. First, it aims to strengthen traceability and oversight. When agents work with multiple institutions, tracking their transactions and accountability becomes complex. Restricting them to one principal makes supervision and auditing easier. Another major driver is fraud prevention. The regulator observed that multi-principal agents often exploit system gaps, resulting in issues like “double-booking” and cloned terminals. By enforcing exclusivity, the CBN hopes to reduce such risks. The rule is also expected to foster uniform compliance, ensuring that each agent operates under a single set of Know Your Customer (KYC) and Anti-Money Laundering (AML) standards. In addition, the move is seen as part of the ongoing maturation of Nigeria’s agent banking sector—from an open, loosely structured system to a more disciplined and institutionalized model. The policy also aligns with other recent reforms, such as transaction caps, geo-fencing, stricter eligibility requirements, and real-time tracking, all designed to create a more stable and transparent system.

While the exclusivity rule may improve oversight, it also brings significant challenges for POS agents, financial institutions, and customers. For agents, it could mean a loss of income diversification since many currently operate across multiple fintech platforms to reach more customers. By restricting them to one principal, some may lose access to certain markets or customer bases. Smaller agents could struggle to secure contracts with larger institutions, and their overall bargaining power may decline. On the other hand, exclusivity could encourage stronger partnerships between agents and their principals. With banks now fully responsible for their agents, they may offer better training, liquidity support, and oversight, which could ultimately improve service quality and compliance.

For fintechs, banks, and payment service providers, the exclusivity rule changes the competitive landscape. Each institution must now work harder to attract and retain agents, potentially leading to higher recruitment costs. Smaller fintechs might struggle to compete with larger, well-funded rivals that can offer better terms. Moreover, with every agent tied exclusively to one principal, these institutions will shoulder greater operational responsibility and risk. They must strengthen their compliance systems and ensure efficient settlements to maintain trust and meet regulatory expectations.

The new rule will also affect consumers. On one hand, increased oversight and accountability may boost public confidence and reduce cases of fraud and irregularities in POS transactions. On the other hand, customers in certain regions—particularly rural or low-traffic areas—might experience reduced service access. Some agents who previously served clients from multiple institutions may now be unable to cater to all customers, potentially leading to longer queues or higher transaction costs. In some cases, these additional compliance burdens might also result in higher service fees passed down to consumers.

The exclusivity policy does not exist in isolation; it complements other reforms that the CBN has introduced to strengthen Nigeria’s financial infrastructure. Among these are transaction caps limiting daily withdrawals to ₦100,000 per customer and ₦1.2 million per agent, geo-fencing rules that confine agents to a 10-metre operational radius, and mandatory geo-tagging of POS terminals to capture real-time location data. The CBN has also tightened agent eligibility, requiring clean credit records, valid BVNs, and approved business premises. By combining these measures, the regulator hopes to enhance control and accountability within the system. However, while this integration makes the framework more coherent, it also increases regulatory pressure on operators.

Analysts have warned that the new rule could lead to unintended consequences. Some agents, particularly smaller ones, may drop out of the system if they fail to secure exclusive partnerships, reducing financial access points in underserved areas. There is also the risk of market concentration, as agents gravitate toward dominant players. The logistical challenge of implementing and enforcing the rule across Nigeria’s estimated five to six million POS devices could strain both regulators and financial institutions. Legal disputes might arise between agents and their former principals as existing contracts are disrupted. Additionally, the rule could slow innovation by limiting the ability of fintechs to experiment with multi-platform models and new service offerings.

To mitigate these risks, the CBN and industry stakeholders will need to take proactive steps. Agents are advised to carefully evaluate potential principals before committing, considering factors like commission rates, settlement reliability, liquidity support, and customer service. They should also negotiate clear and fair contracts that allow for reviews or termination under specific conditions. For their part, banks and fintechs must strengthen their risk management and compliance frameworks while offering training and technical support to agents to ensure a smooth transition. Regulators, meanwhile, may need to adopt a phased implementation approach, granting flexibility to small and rural agents to prevent disruptions to financial inclusion efforts.

In conclusion, the CBN’s exclusivity rule represents a major structural shift in Nigeria’s agent banking sector. If implemented effectively, it could reduce fraud, enhance oversight, and professionalize the POS industry. However, if mismanaged, it may reduce agent coverage, limit competition, and undermine financial inclusion. The success of the policy will depend largely on how well stakeholders adapt during the transition period and how the CBN balances regulatory discipline with flexibility. With enforcement scheduled for April 2026, the coming months will be crucial in determining whether this reform strengthens or destabilizes Nigeria’s growing digital financial ecosystem.