CBN Orders Banks to Reroute PoS Transactions to Reduce Network Failures

CBN Orders Banks to Reroute PoS Transactions to Reduce Network Failures

The Central Bank of Nigeria (CBN) has directed banks, financial institutions, acquirers, and payment service providers to urgently change how Point-of-Sale (PoS) transactions are routed, as part of efforts to reduce frequent system failures across Nigeria’s digital payments ecosystem.

In a circular dated December 11, 2025, and signed by Rakiya Yusuf, Director of the Payments System Supervision Department, the CBN gave industry players one month to comply with a new routing framework. The directive updates earlier guidance and focuses on improving reliability and resilience in PoS transaction processing.

Dual routing is now mandatory

Under the new rule, all PoS transactions—whether from physical terminals or electronic channels—must be connected to both licensed Payment Terminal Service Aggregators (PTSAs) in Nigeria:

• Nigeria Inter-Bank Settlement System (NIBSS)
• Unified Payment Services Limited (UPSL)

This means banks and payment providers can no longer rely on a single aggregator. Instead, transactions must be able to automatically switch between NIBSS and UPSL whenever one platform experiences technical issues. The CBN says this automatic failover system is critical to reducing downtime and transaction failures.

Stronger oversight and reporting requirements

Beyond connectivity, the CBN is tightening operational standards across the payments ecosystem. NIBSS and UPSL are required to work closely with regulated institutions to confirm that their systems can support uninterrupted transactions. These validation tests will form part of the CBN’s ongoing supervision process.

If a system outage occurs, the affected aggregator must immediately notify impacted banks. A detailed incident report—covering the cause, impact, and corrective actions—must then be submitted to the Payments System Supervision Department within 24 hours.

Deadline set for January 2026

The directive effectively gives institutions until mid-January 2026 to fully integrate, configure, and demonstrate compliance. While the circular does not list specific penalties, failure to meet the deadline could lead to regulatory sanctions.

Why this matters for Nigeria’s payment system

PoS terminals play a crucial role in Nigeria’s cashless economy, processing millions of daily transactions across retail, transport, hospitality, and informal markets. However, persistent network outages and failed transactions have frustrated merchants and customers alike.

By enforcing dual routing and automatic switching, the CBN aims to eliminate single points of failure, improve transaction success rates, and strengthen confidence in digital payments. The move builds on earlier initiatives such as PoS geo-tagging and the adoption of modern messaging standards, all part of the regulator’s broader push to modThe Central Bank of Nigeria (CBN) has directed banks, financial institutions, acquirers, and payment service providers to urgently change how Point-of-Sale (PoS) transactions are routed, as part of efforts to reduce frequent system failures across Nigeria’s digital payments ecosystem.

In a circular dated December 11, 2025, and signed by Rakiya Yusuf, Director of the Payments System Supervision Department, the CBN gave industry players one month to comply with a new routing framework. The directive updates earlier guidance and focuses on improving reliability and resilience in PoS transaction processing.

Dual routing is now mandatory

Under the new rule, all PoS transactions—whether from physical terminals or electronic channels—must be connected to both licensed Payment Terminal Service Aggregators (PTSAs) in Nigeria:

• Nigeria Inter-Bank Settlement System (NIBSS)
• Unified Payment Services Limited (UPSL)

This means banks and payment providers can no longer rely on a single aggregator. Instead, transactions must be able to automatically switch between NIBSS and UPSL whenever one platform experiences technical issues. The CBN says this automatic failover system is critical to reducing downtime and transaction failures.

Stronger oversight and reporting requirements

Beyond connectivity, the CBN is tightening operational standards across the payments ecosystem. NIBSS and UPSL are required to work closely with regulated institutions to confirm that their systems can support uninterrupted transactions. These validation tests will form part of the CBN’s ongoing supervision process.

If a system outage occurs, the affected aggregator must immediately notify impacted banks. A detailed incident report—covering the cause, impact, and corrective actions—must then be submitted to the Payments System Supervision Department within 24 hours.

Deadline set for January 2026

The directive effectively gives institutions until mid-January 2026 to fully integrate, configure, and demonstrate compliance. While the circular does not list specific penalties, failure to meet the deadline could lead to regulatory sanctions.

Why this matters for Nigeria’s payment system

PoS terminals play a crucial role in Nigeria’s cashless economy, processing millions of daily transactions across retail, transport, hospitality, and informal markets. However, persistent network outages and failed transactions have frustrated merchants and customers alike.

By enforcing dual routing and automatic switching, the CBN aims to eliminate single points of failure, improve transaction success rates, and strengthen confidence in digital payments. The move builds on earlier initiatives such as PoS geo-tagging and the adoption of modern messaging standards, all part of the regulator’s broader push to modernise Nigeria’s payments infrastructure.

TechCity