ECONOMY
CBN Mandates Dual Routing for PoS Transactions, Sets January 2026 Deadline to Curb System Failures and Strengthen Nigeria’s Digital Payments Network
The Central Bank of Nigeria (CBN) has issued a sweeping directive compelling banks, financial institutions, acquirers, and payment service providers to urgently overhaul how Point-of-Sale (PoS) transactions are routed, in a decisive move to tackle recurring system failures within Nigeria’s digital payments ecosystem.
The directive, contained in a circular dated December 11, 2025, and signed by the Director of the Payments System Supervision Department, Rakiya Yusuf, gives all affected institutions a one-month window to comply with a newly approved routing framework. The updated guidance builds on earlier regulatory instructions and is aimed squarely at improving the reliability, resilience, and efficiency of PoS transaction processing nationwide.
Dual Routing Now Compulsory for All PoS Transactions
Under the new framework, all PoS transactions—whether conducted via physical terminals or electronic payment channels—must be connected simultaneously to Nigeria’s two licensed Payment Terminal Service Aggregators (PTSAs): the Nigeria Inter-Bank Settlement System (NIBSS) and Unified Payment Services Limited (UPSL).
With this directive, banks and payment service providers are no longer permitted to depend on a single transaction aggregator. Instead, their systems must be configured to automatically switch between NIBSS and UPSL whenever one platform experiences technical disruptions. The CBN considers this automatic failover mechanism critical to eliminating downtime and significantly reducing transaction failures that have plagued merchants and customers across the country.
Tougher Operational Standards and Continuous Validation
Beyond enforcing dual connectivity, the apex bank is also tightening operational standards across the payments value chain. NIBSS and UPSL are required to collaborate closely with regulated institutions to validate that their systems are fully capable of supporting seamless and uninterrupted transaction processing.
These validation and stress tests will form part of the CBN’s ongoing supervisory framework, ensuring that compliance is not merely theoretical but practically demonstrated across the ecosystem.
In the event of any system outage, the affected aggregator is required to immediately notify impacted banks and institutions. In addition, a comprehensive incident report detailing the cause of the outage, its scope and impact, as well as corrective measures taken, must be submitted to the Payments System Supervision Department within 24 hours.
January 2026 Compliance Deadline Looms
The circular effectively sets mid-January 2026 as the deadline for full integration, configuration, and demonstration of compliance with the new routing requirements. Although the directive does not explicitly outline penalties, the CBN has made it clear that failure to comply within the stipulated timeframe could attract regulatory sanctions.
Why the Directive Matters
PoS terminals are a backbone of Nigeria’s cashless economy, facilitating millions of daily transactions across retail outlets, transport services, hospitality businesses, and informal markets. Persistent network failures and declined transactions have, however, eroded confidence and imposed losses on merchants and inconvenience on customers.
By mandating dual routing and automatic switching, the CBN aims to eliminate single points of failure, improve transaction success rates, and restore public confidence in digital payment channels. The move aligns with earlier regulatory initiatives such as PoS geo-tagging and the adoption of modern payment messaging standards, reinforcing the CBN’s broader agenda to modernise and future-proof Nigeria’s payments infrastructure.
The directive marks another strong signal of the regulator’s determination to ensure a more stable, efficient, and trustworthy digital payments environment for Africa’s largest economy.