*The House of Representatives Ad-hoc Committee on the Economic, Regulatory and Security Implications of Cryptocurrency Adoption and PoS Operations in Nigeria, expresses deep concerns over the increasing fraud linked to Point-of-Sale operations, and infiltration of unlicensed cryptocurrency-related activities in the FinTech ecosystem

Isola Moses | 绿帽献妻

Against the backdrop of identified gaps in the country鈥檚 fast-growing digital finance ecosystem, the House of Representatives Ad-hoc Committee on the Economic, Regulatory and Security Implications of Cryptocurrency Adoption and PoS Operations in Nigeria, has expressed deep concerns over the increasing fraud linked to Point-of-Sale (PoS) operations, and infiltration of unlicensed cryptocurrency-related activities in the industry.

绿帽献妻 reports Hon. Olufemi Bamisile, Chairman of the House Ad-hoc Committee on the Economic, Regulatory and Security Implications of Cryptocurrency Adoption and POS Operations noted this while speaking at the House Committee鈥檚 resumed investigative hearing with FinTech leaders, PoS operators, and representatives of regulatory and security agencies Monday, November 24, 2025, in Abuja, FCT.

Bamisile observed that recent engagements with the industry stakeholders has exposed deep gaps within Nigeria鈥檚 fast-growing digital finance ecosystem.

The Chairman of the House Ad-hoc Committee affirmed that the Federal lawmakers had received multiple reports of unprofiled agents, cloned terminals, anonymous transactions, and weak Know-Your-Customer (KYC) practices.

He also said that these practices are putting Nigerian consumers at serious risk of financial loss, cybercrime and security breaches.

The legislator stated: 鈥淲e are concerned about the growing rise in fraud associated with POS operations.

鈥淯nprofiled agents, cloned terminals, and weak KYC practices continue to expose citizens to preventable dangers.鈥�

Bamisile further raised what he described as a disturbing trend of PoS operators venturing into digital-asset and cryptocurrency services without regulatory approval.

Such activities, he averred, pose major threats to consumer protection and national security.

The lawmaker disclosed 鈥渢here are allegations and credible information that some PoS operators now engage in crypto-related services for which they are not licensed.

鈥淭his raises serious red flags around anti-money laundering, terrorism financing, data integrity and the misuse of instruments originally designed for basic payment services.鈥�

According to him, the Committee has been alerted to the registration of phoney companies at the Corporate Affairs Commission (CAC), some of which allegedly use the National Identification Number (NINs) and Bank Verification Number (BVNs) of unsuspecting citizens to open accounts, and launder illicit funds through unverified PoS channels.

The Chairman of the Committee said: 鈥淭his highlights weak verification mechanisms and underscores the urgent need for a coordinated oversight framework.鈥�

On FinTechs, consumer privacy and data sovereignty

Besides the PoS operations and unlicensed crypto-related services in the e-payments ecosystem, the House Committee disclosed that it would investigate the storage of sensitive consumer data on foreign servers by major FinTech companies operating in Nigeria.

Bamisile also warned the stakeholders that keeping data outside the country鈥檚 jurisdiction undermines the ability of regulators and security agencies to conduct timely audits, trace suspicious transactions or enforce compliance orders.

He asserted: 鈥淭his has direct national-security implications, especially in a sector connected to terrorism financing risks and cyber-enabled crimes.鈥�

Despite the concerns the Committee raised, Bamisile clarified that the stakeholder engagement was not adversarial after all.

The Chairman of the Ad-hoc Committee acknowledged that the industry also faces challenges, such as fragmented regulation, overlapping mandates by government agencies, policy inconsistencies and multiple compliance requirements.

Lawmakers seek harmonised regulatory framework, improved consumer protection

Restating the core obligation of the House Committee, Hon. Bamisile stated: 鈥淥ur mandate is clear: to recommend legislation that will deliver a harmonised regulatory framework, stronger security safeguards, improved consumer protection, and an environment where innovation and investment can flourish responsibly.鈥�

It is also noted that the Committee would continue its interface with regulatory institutions, FinTech actors, and security agencies in the coming days before submitting its final recommendations to the leadership of the House of Representatives in Abuja.

In his remarks at the forum, Mr. Paul Okafor, National President of the Association of Digital Payment and PoS Operators of Nigeria (ADPPON), warned that the Point-of-Sale (PoS) ecosystem in Nigeria has reached a critical emergency point, with fraud escalating to levels that now pose a direct threat to national security.

Okafor said the rapid expansion of the FinTech industry had overwhelmed regulators, leaving significant gaps that criminals are exploiting.

The President of ADPPON informed the Federal lawmakers that as PoS operators have grown from 50,000 in 2017 to over 2.3 million as of now, regulatory capacity has expanded by merely 鈥渓ess than 10 percent鈥�.

He argued: 鈥淭his imbalance is what has produced the crisis we are facing today.

鈥淭he regulators, especially the CBN, are not incompetent; they are overwhelmed by the sheer speed and scale of growth.鈥�

Referencing data from the Nigeria Inter-Bank Settlement System (NIBSS), Okafor further disclosed that PoS, banking and digital-payment channels all suffered N17.67 billion in fraud losses 2023, affecting over 80,000 consumers.

According to him, the situation however, worsened drastically 2024, as the industry recorded losses to the tune of N52.26 billion 鈥攁 N34.59 billion increase in just a year.

Okafor said the attempted fraud across financial channels as well increased by 338 percent, while PoS channels alone accounted for 26.37 percent of all cases recorded in the past year.

Likewise, the Financial Institutions Training Centre (FITC), Lagos, another industry monitor, was said to have reported a 95 percent rise in PoS fraud in the Fourth Quarter (Q4) of 2024.

The National President of ADPPON stated: 鈥淢ore than 38,000 PoS fraud cases were officially reported in one year.

鈥淯nofficially, we estimate that over 70,000 cases go unreported because victims simply give up.鈥�

He also disclosed that criminals are increasingly using PoS operators as cash-out points for ransom and illicit funds.

He said: 鈥淚n some states, security agencies report that nearly 40 percent of kidnap ransom payments pass through informal POS cash-out channels.鈥�

Okafor warned 鈥渢his is no longer a FinTech issue; this is a national security threat.鈥�

He, therefore, urged the House Ad-hoc Committee on the Economic, Regulatory and Security Implications of Cryptocurrency Adoption and POS Operations to issue a clear directive, compelling the Central Bank of Nigeria to introduce urgent reforms to rescue the system.

He stated: 鈥淚f we fail to act, fraud will escalate, kidnappers will continue to exploit the system, Nigerians will lose more money, financial inclusion will collapse, and trust in the financial system will be destroyed.

鈥淎nd when trust dies, the financial system dies.鈥�

As part of measures to restore order and rebuild confidence in the e-payments space, however, Okafor outlined three key measures ADPPON wants implemented without delay.

These are mandatory Nigeria Police Force鈥揘CCC Cybercrime Clearance Certificate (CCC) for all POS operators; mandatory CAC registration for every PoS business to ensure traceability; and mandatory membership of recognised trade associations to enforce discipline, training and self-regulation.

Okafor added: 鈥淭hese are practical, lawful solutions aligned with existing laws and international standards. They can be implemented without creating new legislation.鈥�

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