Dr. Monday O. Ubani, SAN, a prominent legal practitioner and public affairs analyst, has raised alarm over the rampant misuse of Point of Sale (POS) transactions in Nigeria, warning that unregulated operations are threatening national security, financial integrity, and judicial processes.
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In a detailed statement, Ubani highlighted concerns raised by a High Court Judge from Nigeria’s Eastern Region, who revealed that POS machines are increasingly exploited by kidnappers and fraud syndicates, with untraceable transactions worth tens of millions of naira frustrating court cases. Urging immediate action from the Central Bank of Nigeria (CBN), policymakers, and security agencies, Ubani proposed stringent regulations, including mandatory identification for withdrawals, BVN/NIN linkage for operators, and real-time monitoring to curb criminal activities.
Ubani’s statement was prompted by a High Court Judge’s distress over the exploitation of POS systems in criminal activities, particularly kidnapping and fraud. The judge noted that numerous cases before his court involved untraceable financial transactions, with POS operators’ inability to provide beneficiary identities or transaction records hindering justice. In one case, a kidnapped victim’s family paid ₦90 million in ransom via POS transactions, but the funds’ trail vanished, leaving law enforcement and the court powerless (Ubani Statement, June 3, 2025).
“The inability to trace the flow of funds or the identities of POS operators and beneficiaries has frustrated litigants, prosecutors, and even the court itself,” Ubani quoted the judge, emphasizing that the absence of regulatory oversight renders the justice system “impotent” in such cases. He warned that POS terminals, originally a boon for financial inclusion in rural areas, have become “unregulated financial conduits” for criminals due to lax controls.
Ubani identified critical gaps in the current POS framework, noting that many agents operate without proper vetting, fixed addresses, or adherence to Know Your Customer (KYC) protocols. He highlighted the unchecked practice of disbursing large sums to individuals without identification, often under false identities, making it impossible to trace funds in criminal investigations. “There is no existing law that holds POS agents accountable for failing to obtain documentation from recipients of disbursed funds,” he stated, describing this as a loophole exploited by criminal networks.
The lack of traceability, Ubani argued, enables kidnappers, fraudsters, and other criminals to channel massive funds through POS terminals, leaving no verifiable data trail. This not only undermines judicial processes but also poses a broader threat to Nigeria’s financial system and national security.
Proposed Regulatory Measures
To address the crisis, Ubani outlined seven urgent regulatory recommendations:
- CBN Intervention: The CBN should enforce strict regulations for POS operators, including registration, licensing, transaction limits, geo-tagging of devices, and real-time monitoring.
- BVN/NIN Linkage: All POS terminals and linked bank accounts must be tied to operators’ BVN and NIN for accountability and traceability.
- Mandatory Identification for Withdrawals: Individuals withdrawing transferred funds via POS must present verifiable IDs (e.g., NIN slip, Voter’s Card, Driver’s License, or International Passport), with agents retaining digital or photocopied records and photographs.
- Operator Accountability: POS agents failing to comply with identification requirements should face criminal and civil liability for aiding crimes.
- Security Integration: The Economic and Financial Crimes Commission (EFCC), Department of State Services (DSS), Nigeria Police, and Nigerian Financial Intelligence Unit (NFIU) should access a centralized POS transaction database to detect suspicious activities.
- Geo-Fencing and AI Surveillance: Deploy AI-backed monitoring and geo-fencing to track POS usage, with heightened scrutiny for high-volume rural agents.
- Public Education: Sensitize citizens on safe POS use and encourage reporting of suspicious transactions or agents.
Ubani also proposed banning POS agents from receiving funds on behalf of customers unless the end-user is present and complies with KYC requirements, aiming to close channels used by criminal networks.
Ubani described the situation as “unsustainable,” warning that unchecked POS misuse could escalate into a national emergency. “The law cannot function in the absence of proof, and neither can justice be served in a system that enables criminal anonymity,” he stated, urging the CBN, National Assembly, financial institutions, and NFIU to act decisively. He also appealed to Nigerians to demand transparency in POS transactions to safeguard the financial ecosystem.
TheNigeriaLawyer contacted the CBN and NFIU for comments on Ubani’s recommendations but received no response by press time. The proposed reforms, if implemented, could restore integrity to POS operations, enhance judicial efficacy, and curb financial crimes. However, the challenge lies in balancing regulation with the system’s role in financial inclusion, particularly for rural communities.
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