Nigerians shun PoS transactions over illegal charges

* Merchants, not consumers should pay all charges including Stamp Duty ─CBN

Isola Moses | ConsumerConnect

Following the implementation of the fresh though controversial charges on Point of Sales (PoS) terminals this year, reports say the volume of electronic payment transactions through PoS terminals has dropped by 4.83 billion in one month.

ConsumerConnect learnt that it reduced from 46.13 billion deals in December 2019 to 41.3 billion in January 2020, according to the Nigerian Interbank Settlement System (NIBSS) report.

The drop in PoS transactions in cash value totals N60 billion, as merchants ─retail outlets in the e-payment value chain─ continue to collect N50 Stamp Duty charge per transaction from PoS users.

The transaction value for PoS fell from N373 billion to N313 billion in December 2019 and January 2020 respectively.

Reports further indicated that collection of the illegal charge by merchants – petrol stations, supermarkets, and other business owners that deploy PoS machines for payment – has continued against the Central Bank of Nigeria’s (CBN) order that payment by consumers of financial products and services should be stopped.

Although the CBN directed that the charge should be borne by merchants themselves, not PoS users, there has not been any enforcement of the order.

Instead, ConsumerConnect checks with a numbers of PoS operators revealed that most of the merchants in Lagos State, for instance, yet largely blame either their consumers’ banks, the CBN, or outright transaction errors while feigning ignorance of such illegal deductions from clients’ accounts during transactions.

The NIBSS data also showed that the decline in PoS usage occurred despite increase in the number of registered PoS terminals by the banks from 446,453 to 449,998 in December 2019.

According to the report, the banks   deployed 303,162 PoS terminals in December 2019 and 306,409 PoS terminals in January.

This showed that, despite the deployment of more terminals to merchants, customers demand for the service is fast dropping.

The Nation investigation in Lagos also showed that filling station operators in the downstream oil sector and supermarkets among others, have continued to collect the illegal fee on PoS transactions by consumers.

Filling stations and supermarkets add the fee to customers’ purchases.

To avoid dispute with its consumers, some filling stations post the notice of payment on their pumps, while others simply add the cost to customers’ bills without informing them.

Meanwhile, Uju Ogubunka, President, Bank Customers Association of Nigeria, has condemned the continuous collection despite CBN’s directive as well as the intervention of the Federal Competition and Consumer Protection Commission (FCCPC) that collection of these unlawful fees from end-consumers should stop.

Ogubunka urged the Nigerian National Petroleum Corporation (NNPC) to ensure compliance with the directive by oil marketers.

The apex bank (CBN) should also ensure full compliance across retail shops, he advised. “I expect the CBN to move beyond its directive that bank customers reject the fee and fight for customers.

“Another option is for the customers to carry cash and avoid the fee where the risks are minimal.”

Likewise, Musa Jimoh, Director, Payment System Management Department, CBN, has urged consumers of financial products and services to reject the N50 PoS fee.

He stated that Stamp Duty is a fee regulated by an Act, adding that it, as it is today, has been misinterpreted by these merchants.

Jimoh said: “Our circular that talks about merchants paying stamp duty according to the law does not say that the stamp duty should be paid by the consumer.

“That’s actually a misrepresentation of the CBN’s directive.

“What our directive says is that merchants should pay all necessary charges as regulated by the government agency, including Stamp Duty.

“When there is an electronic transaction to an account other than savings account and the transaction amount is more than N1,000, you have to pay Stamp Duty.”

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