A battle has ensued between PoS operators and the Corporate Affairs Commission (CAC) over the mandatory registration of PoS operators with the CAC. This move, intended to safeguard the businesses of fintechs and their customers and strengthen the economy, has been met with resistance from PoS operators. They disagree with the demand and are now considering taking the case to court for final determination.
Why It Matters
The directive from the CAC has significant implications for the fintech industry and PoS operators in Nigeria. The mandatory registration is seen as a move to formalize and regulate the sector, ensuring better oversight and protection for all stakeholders involved.
However, this directive has been met with resistance from PoS operators who argue that the registration requirement should not apply to individual agents operating under their personal names. The outcome of this legal battle could set a precedent for regulatory practices in Nigeria’s burgeoning fintech industry and impact thousands of small-scale operators.
What They Are Saying
Elegbede Oluwasegun, the national general secretary of the Association of Mobile Money and Bank Agents in Nigeria (AMMBAN), has announced that PoS operators plan to take legal action to challenge the legality of the CAC’s directive. Oluwasegun contends that the CAC lacks jurisdiction over individuals not operating as a company, citing Section 18 (2) of CAMA 2020 and relevant sections of the CBN policy to support their stance. “For CAC, when they said all PoS agents should… but as an individual agent, you are not requested to register with CAC if you are using your name,” Oluwasegun stated. He emphasized that individual agents conducting business under their personal names are legitimate entities not required to register with the CAC.
Oluwasegun also pointed out that the CBN policy recognizes both individual and non-individual agents. He provided the example of a provision store operating as ‘Iya Seun’ store, which is not bound by the law to register if it is not a business name. “Same with our kind of business, and that is our position,” he said. The association, while seeking a legal resolution, clarifies that it does not aim for confrontation but rather wishes to test the legality of the CAC’s order.
Bottom Line
The impending legal battle between PoS operators and the CAC over mandatory registration highlights the ongoing tension between regulatory authorities and small-scale operators in Nigeria’s fintech sector. The outcome will have far-reaching implications for regulatory practices and could reshape the operational landscape for thousands of PoS agents across the country. As the AMMBAN prepares to challenge the CAC’s directive in court, the case underscores the need for clear and fair regulatory frameworks that balance oversight with the operational realities of small businesses.
