The Central Bank of Nigeria (CBN) has extended the deadline for implementing geo-fencing on Point-of-Sale terminals to 1 August 2026, providing banks and payment service providers with an additional year to achieve compliance.
The extension was announced in a circular dated 29 May, signed by Dr Rakiya Yusuf, director of the CBN's Payments System Supervision Department. The directive also significantly expanded the permitted geo-fence radius for PoS terminals.
"Geo-fence radius is hereby increased from 10 metres to 70 metres," the circular stated.
Revised Requirements and Timeline
The new directive modifies an August 2025 policy that originally mandated geo-tagging of PoS terminals and required migration to the ISO 20022 payment messaging standard. The technology works by fixing a terminal's location through coordinates and creating a virtual boundary around the device.
Financial institutions must resolve any outstanding issues with the National Central Switch and provide evidence of compliance to the supervision department by 31 July 2026. The policy affects all payment sector participants, including banks, microfinance institutions, mobile money operators, switching companies, and super agents.
Security and Fraud Prevention Goals
The geo-fencing initiative aims to enhance transaction monitoring capabilities and reduce fraudulent activities within Nigeria's electronic payment ecosystem. The system flags any terminal moved beyond its registered business location, providing regulators with better oversight of payment activities.
According to the CBN, the expanded radius addresses operational challenges identified during stakeholder consultations. Payment industry participants had raised concerns about the practical implementation of the original 10-metre restriction.
Industry Impact and Implementation
The extension provides breathing room for financial institutions struggling to meet the original timeline while implementing the complex technical requirements. The geo-tagging system requires significant infrastructure upgrades and coordination with the National Central Switch.
Regulators emphasize that tighter location monitoring will improve accountability and security as PoS terminals become more prevalent in Nigeria's payment landscape. The technology is expected to help authorities track suspicious transactions and identify potentially fraudulent activities more effectively.
The policy reflects broader efforts to strengthen Nigeria's payment security infrastructure and align with international standards through the adoption of ISO 20022 messaging protocols. Financial institutions now have until August 2026 to complete their system upgrades and demonstrate full compliance with the new requirements.