Point-of-sale (PoS) agents, have become a lifeline for millions of Nigerians, providing essential financial services in urban and rural areas where access to banking facilities remains limited.
These mobile money operators, equipped with handheld devices, have grown increasingly popular, especially since the persistent shortage of cash at ATMs following last year’s controversial redesign of the naira.
“There are three PoS agents on my street alone,” said Chi Etche, a 29-year-old media executive.
“This saves me the trouble of taking a bike or cab to reach the nearest bank ATM,” he continued.
However, growing opposition to their activities is raising concerns about alleged exploitation.
Critics accuse some agents of taking advantage of Nigeria’s financial struggles to charge exorbitant fees, further compounding the cost-of-living crisis.
“We are now buying back our money from PoS agents,” lamented Ibrahim Adamu, a 39-year-old trader.
“The commission they charge is rising, and ATMs rarely have cash available,” he continued.
The Central Bank of Nigeria (CBN) initiated policies in 2013 to expand financial access, leading to a rise in mobile money agents.
By the end of 2022, 74% of Nigerian adults had access to financial services, according to EFInA, with 52% relying on traditional banks.
However, the CBN’s cash redesign policy, introduced in October 2022, compounded cash shortages.
The initiative capped ATM withdrawals and over-the-counter cash access, leaving many Nigerians reliant on PoS agents.
“CBN policies simultaneously raised barriers for banks to offer cash and cash alternatives in pursuit of its cashless mandate,” explained Ikemesit Effiong, a partner at SBM Intelligence.
He noted that PoS agents often operate without proper regulatory oversight, exacerbating the situation.
ATM withdrawals remain capped at ₦20,000 ($12.45) per day, with withdrawals from other banks limited to ₦5,000 daily.
Over-the-counter cash withdrawals attract punitive fees, while banking hall queues and frequent ATM downtimes further frustrate customers.
Amid these challenges, PoS agents have been accused of charging excessive fees.
Uzoma Dozie, founder of the challenger bank Sparkle, acknowledged the issue but attributed it to broader systemic problems.
“Some agents exploit cash scarcity by charging high fees for withdrawals, but this reflects cash availability issues and weak oversight, not inherent flaws in the mobile money system,” Dozie said.
Some agents admitted to sourcing cash from unconventional channels, such as traders and currency exchange operators, to sustain their businesses.
“I buy cash from markets and factor that cost into my commission,” said Ayo Olaoluwa, a PoS agent.
For others, the business provides a modest but essential income.
“The income isn’t huge, but it keeps me going,” said Ifeoma Onwuabuchi, a 46-year-old operator.
CBN Governor Olayemi Cardoso has vowed to address the issue, warning banks against leaving ATMs empty and pledging penalties for noncompliance.
“We urge full regulatory compliance by all stakeholders, including PoS agents, to improve service delivery and promote digital transaction channels,” Cardoso said.
Dozie emphasized that proper regulation and enforcement could mitigate exploitation while preserving the benefits of agent banking for millions of Nigerians.
AFP
