POS operators to suspend services over exclusivity practice

The Association of Point of Sale Service Providers (POS) has warned that it may suspend and cripple banking operations in Nigeria if the Central Bank of Nigeria (CBN) and the Federal Competition and Consumer Protection Act (FCCPC) authorities do not intervene promptly in an alleged exclusivity practice by two companies.

The statement, signed by Yomi Idowu, Communications Consultant to the Association, was released after the POS operators wrote a letter protesting what they described as persistent unlawful decisions by the two companies. Idowu said the actions of the companies violate existing rules and regulations of the CBN and the FCCPC.

The Association, which represents a coalition of CBN‑licensed payment acceptors, acquirers, processors and switches, said it would have no choice but to suspend the acceptance, acquiring, processing and switching of Verve Card transactions.

In the letter, the POS Association said the decision was unavoidable because the companies’ conduct “jointly undermines the integrity of Nigeria’s payments ecosystem, erodes the capital base of participating institutions and violates several regulatory requirements.”

The Association listed the alleged breaches as follows:

• Maintaining an exclusive monopoly over Verve transaction processing;
• Abusing a dominant position in the domestic card scheme market, contrary to section 72 of the FCCPC and sections 3, 4, 7, 3 of the CBN Guidelines on Operation of Electronic Payment Channels;
• Imposing scheme fees that exceed the regulated Merchant Service Commission (MSC) share attributable to acquirers under current CBN regulations;
• Unauthorized and unlawful debits from settlement accounts of acquirers, processors and switches.

Mr. Idowu concluded that, “Ironically, other card scheme operators have since abolished all forms of exclusivity in compliance with CBN regulations.”

The post “POS operators to suspend services over exclusivity practice” first appeared on Vanguard News.