The Central Bank of Nigeria (CBN) has introduced a directive that sets a cap on contactless payments.
This information was revealed by the CBN through two circulars signed by Musa Jimoh, the Director of the Payments System Management Department at CBN.
The initial circular comprises instructions for banks, as well as other financial institutions and payments service providers, regarding contactless payment procedures.
It read in part, “The Central Bank of Nigeria, in furtherance of its efforts to standardize operations in the payments system, while encouraging the deployment of innovative products and sustaining the financial system stability, developed the Guidelines for Contactless Payments in Nigeria.
“Contactless payment, which involves the consummation of financial transactions without physical contact between the payer and the acquiring devices, has been identified as an innovative payment option for safe and efficient conduct of low- value and large-volume payments.
“The Guidelines was conceived to ensure that participants in contactless payments implement appropriate risk management processes and measures while keeping to best relevant standards.”
The bank emphasized that strict adherence to the Guidelines is mandatory for all banks, financial institutions, and payments service providers.
In the second circular, the bank specified that contactless payments made through accounts/wallets in Nigeria are subject to a transaction limit of N15,000.
Additionally, it was stated that a daily cumulative limit of N50,000 applies to such transactions.
The circular read, “Following the issuance of the Guidelines on Contactless Payments in Nigeria and in cognisance of the risks associated with contactless payments, the Bank hereby defines transaction limits above which verification and authorisation are required.”
The apex bank noted that transactions above the daily limit will require appropriate verification and authorization.
It read, “Higher-value contactless payments are transactions that exceed the above stated limits and shall require appropriate verification and authorisation. For these transactions, existing KYC requirements and limits on the electronic payment channels shall apply.
“Limits above this stipulated daily cumulative limit shall be conducted using contact-based technology.”