LAGOS — Prominent legal practitioner and Senior Advocate of Nigeria, Dr. Monday Ubani, has raised the alarm over the growing abuse of Point of Sale (POS) machines in Nigeria, warning that the once-innovative payment system is now being hijacked by criminal syndicates to move illicit funds beyond the reach of security agencies.
Ubani, in a statement titled “The Urgent Need to Regulate POS Transactions in Nigeria’s Financial Ecosystem”, called on the Central Bank of Nigeria (CBN), the National Assembly, and security agencies to urgently take decisive action to stem what he described as a looming national security and judicial crisis.
According to him, the situation has become so dire that judges are now expressing frustration over their inability to trace financial transactions in high-profile criminal cases.
He recalled a recent conversation with a High Court judge in Eastern Nigeria, who lamented how several kidnap and fraud cases involving tens of millions of naira had collapsed in court due to untraceable POS transactions.
In many of these cases, neither the POS agents involved nor the recipients of the funds could be identified or located.
Ubani noted that the POS platform, which was initially introduced to promote financial inclusion, particularly in rural and underserved communities, is now being exploited by criminal elements who use it to bypass surveillance and traceability.
He recounted a harrowing case in which a kidnapped victim’s family was forced to pay a ₦90 million ransom via POS transactions, only for the money trail to vanish without a trace.
He described the situation as deeply troubling and dangerous, warning that the continued misuse of POS systems is fast eroding public trust in the financial system and the justice process.
Ubani condemned the absence of effective regulation over the operations of POS agents, many of whom, he said, operate without proper identity verification, a fixed business address, or any obligation to collect documentation from those withdrawing large sums.
The lack of mandatory Know Your Customer (KYC) compliance, he said, is what makes the system ripe for abuse. He expressed concern that this regulatory loophole has effectively created a parallel, unmonitored financial channel now favoured by criminal networks and used to move large sums of money anonymously.
Ubani urged the CBN to take immediate steps to regularise the operations of POS agents nationwide, insisting that all operators must be licensed, registered, and subjected to real-time monitoring.
He also called for a mandatory linkage of POS terminals to their operators’ Bank Verification Numbers (BVN) and National Identification Numbers (NIN), saying this would help security agencies trace suspicious activities more efficiently.
He further recommended that no individual should be allowed to withdraw transferred funds via a POS terminal without first presenting a verifiable means of identification, such as a NIN slip, voter’s card, driver’s licence, or international passport.
He said POS agents must be mandated to retain copies of such identification, alongside a photograph of the customer, which should be made available to law enforcement on request.
Ubani warned that failure by POS agents to comply with these measures should attract criminal and civil penalties, including liability for aiding and abetting crime.
He also urged security agencies such as the EFCC, DSS, Police, and the Financial Intelligence Unit to be granted secure access to a centralised POS transaction database, which would allow for the detection of abnormal patterns and the early flagging of suspicious financial activity.
He called for the deployment of AI-powered surveillance and geo-fencing technology to monitor high-risk POS terminals, especially those operating in remote or high-crime areas with unusually high transaction volumes.
Beyond regulation, he stressed the need for public sensitisation. He said members of the public must be educated on the proper use of POS services and encouraged to demand proper identification from agents and report suspicious activity to the authorities.
According to him, community vigilance and public cooperation will play a crucial role in curbing the growing misuse of POS machines.
Ubani described the situation as a ticking time bomb that could cripple Nigeria’s justice system if left unchecked. He said law enforcement and the judiciary are helpless in the face of a financial network that allows criminals to operate without leaving a trace.
He warned that the longer the system remains unregulated, the more it will be exploited by those who seek to undermine the nation’s security and legal institutions.
He called on the Central Bank of Nigeria, the National Assembly, financial institutions, and security agencies to treat the issue as a matter of national urgency.
According to him, the integrity of Nigeria’s financial and legal systems is at stake.
He urged all stakeholders to close what he termed a gaping hole in the nation’s financial and security architecture, and to restore transparency, accountability, and control to one of the most widely used — and increasingly abused — financial platforms in the country.
