E-Financial
Stamp Duty Charge on PoS Transactions As A Disincentive to Increased Penetration
The burden of handling cash by banks and merchants was becoming enormous that central bank of Nigeria conceived and began promoting electronic payment channels to ease the risk.
There are several electronic channels of payment including point of sale terminals (PoS), ATM, instant transfer among others.
The use of PoS for payment at merchant location in Nigeria witnessed acceptance issues by both merchants and customers due to socio-cultural belief until CBN cashless initiative and other policies aimed at driving its penetration.
Today, even as the channel has received some acceptance especially in urban and semi-urban areas, but very many Nigerians and merchants are yet to embrace PoS as a veritable means of payment.
Recently, customers and merchants have expressed reservation in the use of PoS because of the issue of chargeback – a situation where customer account is debited and merchant account not credited. Customers are finding it difficult to get refund in such case; often time merchants are faced with quarry over demand by customers to go with purchased goods.
More so, the desired penetration level in the use of PoS as a means of payment has not been achieved for transactions on the system to be subjected to tax.
As at the end of October this year there are 273,082 deployed PoS terminal for a population of over 100million and volume of 41.6 million.
This figures show level of penetration and use of the channel which by any perimeter cannot be said to have reached an acceptable level to warrant forcing customers to pay for its use.
Before now, the fee paid by merchants on the aggregate PoS transactions carried out on a particular period, was never passed to customers.
Merchant Service Charge was also reviewed downward from 0.75 per cent (capped at N1, 200) to 0.50 per cent (capped at N1, 000).
A payment terminal service provider who does not want his name mentioned, decried the proposed tax on transactions through the channel, saying that such tax will adversely affect transactions through the channel.
He added that such tax if implemented will make people to go back to holding cash again which is retrogressive to the progress made in cashless initiative.
According to him, “PoS terminal is the most popular channel in the financial inclusion programme of CBN and the banks and any tax on transaction through that channel will amount to disincentive.”
Victor Olojo, president, Association of Mobile Money and Bank Agents in Nigeria (AMMBAN) is deeply concerned about the introduction of stamp duty on single count POS transactions above N1,000 by the CBN. This policy works against the Financial Inclusion agenda and will further make accessing financial services more expensive and burdensome for Nigerians.
The cost of accessing financial services, if high will negatively affect the financial inclusion drive. This policy will increase the cost of providing financial services to customers and in turn, make the effort of financial inclusion counter-productive for all stakeholders; which will end up having negative impact on agents’ capacity to effectively serve the last mile.
As last mile financial service providers, AMMBAN will like to use this medium to call upon relevant authorities to either reverse the policy or review the threshold amount imposed with stamp duty upward from N1,000 to N20,000.
The extra charge on customer’s transaction followed a CBN’s directive to banks to charge N50 Stamp Duty on individual transactions, rather than merchants’ accounts.
The directive on the Unbundling of Merchant Settlement Amounts was contained in the CBN circular to banks, processors and switches, titled: “Review of Process for Merchants Collections on Electronic Transactions”.
The policy stipulates Stamp Duties Payment on individual transactions that occur on PoS, rather than previous plans where charges occurred on aggregate transactions.
The circular signed by CBN Director, Payments System Management Department, Sam Okojere, authorised banks to unbundle merchant settlement amounts and charge applicable taxes and duties on individual transactions as stipulated by regulators.
Securities and Exchange Commission (SEC) has urged Nigerians to report any suspected illegal investment schemes to the commission for proper investigation and necessary action.
This is in the light of the recent collapse of Crypto Bridge Exchange (CBEX).
The Commission issued a notice on Thursday to the investing public, warning that Ponzi investment schemes pose a significant danger to the growth of the capital market.
In its latest advisory, the Commission highlighted the growing threats and risks posed by Ponzi schemes, illegal investment operations, and unregistered digital asset platforms.
It explained that fraudulent entities and individuals continue to exploit unsuspecting investors with deceptive promises of high returns, often leveraging the allure of digital assets to create a false sense of legitimacy.
“The public is strongly advised to be wary of investment opportunities that promise guaranteed or unusually high returns with little or no risk.
“These include unregistered platforms offering cryptocurrency investments, forex trading, or blockchain-based schemes, without undergoing the prescribed processes to obtain prior approval from the SEC.
“The SEC reiterates in this regard that, ‘If it sounds too good to be true, it likely is.’”
The Commission urged potential investors to conduct thorough due diligence before investing and to verify the registration status of the company or individual offering the investment through the SEC’s website.
The Commission explained that Section 196(3) of the Investments and Securities Act, 2025, criminalizes the promotion and operation of prohibited or unregistered schemes.
“This violation is punishable, upon conviction, by a fine of not less than ₦20 million or a prison term of 10 years, or both,” the Commission warned.
The SEC stated that it is fully committed to identifying and prosecuting offenders to the full extent of the law.
“We encourage the public to partner with the SEC to safeguard the integrity of the investment environment in Nigeria by promptly reporting suspected illegal investment schemes to the SEC,” the notice concluded.
The Nigerian federal government announced that the Electronic Money Transfer Levy (EMTL) generated $49.5 million in revenue, with fintech companies contributing $18 million.
This fund, as reported by the Federation Account Allocation Committee, is a considerable 56.80 percent increase over the $31.6 million earned during the same period in 2024.
Previously, the charge mainly affected established banking institutions. However, fintech firms have been included because they have contributed a phenomenal 2,507.94 percent growth in transaction values since 2020.
The EMTL is part of the government’s attempt to regulate the booming fintech sector, which completed transactions worth $29 billion in 2023 and $49.3 billion in 2024.
The EMTL was created by the Finance Act 2020 as an amendment to the Stamp Duty Act. It charges $0.03 (N50) for electronic transactions of $6.19 (N10,000) or more made through banks and financial institutions.
This tax seeks to capitalise on the increasing expansion of electronic payments, which will exceed $619.70 billion in total transactions by 2024.
In response to the burgeoning fintech sector, the government has increased its tax base, with annual EMTL collections expected to increase by 31.35 percent.
According to the Medium Term Fiscal Framework for 2025-2027, the federal government expects EMTL revenue to reach $142 million in 2025, up from $108 million in 2024.
However, industry experts have expressed concern about the potential impact of additional taxes on users.
Amid mounting macroeconomic uncertainty, Nigerians are leaning heavily towards savings and low-risk financial instruments, with recent data from the Central Bank of Nigeria (CBN) showing a marked increase in quasi-money holdings.
Quasi-money are assets that are easily and quickly convertible into cash. They are considered to be close substitutes for cash in the economy.
According to the CBN’s Money and Credit Statistics for March 2025, quasi-money, comprising savings deposits, fixed-term deposits and other liquid but non-transactional assets, rose to N75.65 trillion, representing a 3.65 per cent month-on-month (m/m) increase and a 26.42 per cent rise year-on-year, up from N59.84 trillion in March 2024.
The surge highlights a growing preference for capital preservation, as households and businesses seek refuge in interest-bearing instruments amid Nigeria’s ongoing economic slowdown.
“The rising volume of quasi money reflects both a cautious approach to spending and increasing trust in formal financial institutions,” said a senior analyst at Vetiva Capital. “It’s a defensive strategy by savers who are navigating inflationary pressures and volatile market conditions.”
The CBN has maintained a tight monetary policy for over a year, with high interest rates designed to tame inflation. This stance has made fixed-income securities, such as treasury bills and term deposits, especially attractive to investors.
In January 2025, the CBN’s auction for 364-day treasury bills saw an oversubscription of N1.47 trillion, with stop rates reaching 22.6 per cent. By mid-February, total subscriptions across tenors remained strong at N2.41 trillion, underlining sustained demand for secure, high-yield instruments.
The data also reveals that broad money supply (M2) grew to N114.20 trillion in March 2025, a 23.69 per cent increase year-on-year, with quasi money continuing to dominate M2 composition. Meanwhile, demand deposits rose to N33.96 trillion, up 17.65 per cent from the same period last year, while currency outside banks jumped 26.72 per cent to N4.59 trillion.
The central bank also reported mixed trends in domestic credit: Net domestic credit rose 12.47 per cent year-on-year to N103.37 trillion, though it dipped 1.20 per cent month-on-month.
Credit to the government grew 31.99 per cent to N25.86 trillion year-on-year but fell 4.63 per cent in March, suggesting a brief pause in government borrowing whilst private sector credit growth remained modest at 7.10 per cent pointing to conservative lending practices and subdued appetite for new debt in the real economy.
Analysts say the quasi-money uptick reflects a broader trend of financial system deepening, driven by digitization and formal banking efforts. The rise in savings could, over time, translate into stronger capital pools for lending, once macroeconomic stability returns.
While the flight to safety is a rational response to uncertainty, experts warn that over-reliance on fixed-income assets could limit economic dynamism in the long term.
However, for now, Nigeria’s financial landscape suggests that stability, not speculation, is the dominant mood among savers and investors.
EFCC Secures Arrest Warrant for Six CBEX Promoters
FBI Sends Team to Nigeria to Track Down ‘Sextortion’ Scammers
Report Suspected Illegal Investment Schemes to SEC
Fintechs Add $18m to New Tax Initiative
ALX Nigeria Launches 2025 Ventures Incubator, Premieres Pan-African “Do Hard Things” Finale
Telecom3 days agoNigeria Hits 1 Terabit Internet Traffic Milestone
E-Financial3 days agoFCMB Capital Markets Leads ₦11.85bn GLNG Bond for LNG Plant Expansion
General News3 days agoFG to Introduce New Tax Credit Scheme to Replace Pioneer Status Incentive
Telecom3 days agoMTN Nigeria Faces Class Action Lawsuit over Alleged Data Mismanagement
News3 days agoIMF Downgrades Nigeria’s Economic Growth Forecast Amid Oil Price Decline
E-Financial2 days agoUnion Bank’s Edu360 Initiative Scores Big for Nigerian Football Development
News3 days agoNITDA Fixes Date for Inaugural Meeting of the Startup Consultative Forum
Telecom3 days agoMart Networks Unveils Invinsense 6.0: AI-Powered Cybersecurity Revolution in Africa