The Central Bank of Nigeria (CBN) has mandated that all commercial banks, microfinance institutions, mobile money operators, and other authorized participants within the payment ecosystem complete their transition to the ISO 20022 payment messaging standard by October 31.
This directive was issued through an official circular signed by Rakiya Yusuf, Director of the Payments System Supervision Department, on Tuesday. The CBN emphasized that ISO 20022 represents the globally recognized framework for financial messaging, aligning Nigeria’s payment infrastructure with the international migration schedule set by the Society for Worldwide Interbank Financial Telecommunication (SWIFT).
Mandatory Compliance and Validation Timeline
Starting October 20, the CBN will initiate compliance verification exercises to ensure all payment messages-both domestic and cross-border-conform strictly to the ISO 20022 format as specified by the CBN and SWIFT standards. The circular highlights the necessity for institutions to accurately complete all required data fields, including identifiers for payers and payees, merchant and agent information, and detailed transaction metadata.
Enhanced Geolocation Requirements for Payment Terminals
In a bid to bolster transaction security and data accuracy, the CBN has stipulated that all payment terminals must incorporate built-in geolocation capabilities, supported by dual-frequency GPS technology to guarantee precise location tracking. Additionally, every terminal must be registered with a Payment Terminal Service Aggregator (PTSA) and tagged with exact latitude and longitude coordinates corresponding to the merchant’s physical location.
Certification and Software Integration
Operators are also required to ensure their Point of Sale (PoS) devices and related applications receive certification from the National Central Switch. This certification process involves embedding the National Central Switch Software Development Kit (SDK), which facilitates geolocation tracking and enforces geofencing protocols. The SDK must be activated at the registered business site, with a geofence radius capped at 10 meters to restrict merchant activity within a defined perimeter.
Technical Specifications and Deadlines
To maintain system compatibility and security, the CBN has set Android OS version 10 as the minimum operating system for all payment terminals. Existing terminals must be geo-tagged within 60 days from the date of the circular, while new devices must undergo geo-tagging before certification and activation. Terminals that are not routed through a PTSA will be prohibited from processing transactions.
Objectives Behind the Directive
These comprehensive measures aim to elevate the integrity of payment transactions, enhance fraud detection and prevention mechanisms, and improve the overall quality of data within Nigeria’s payment infrastructure. By adopting ISO 20022 and enforcing stringent geolocation standards, the CBN is positioning the country’s financial ecosystem to meet global best practices and foster greater trust in electronic payments.
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