pos guidelines august 2011 final final (2)

8/4/2019 Pos Guidelines August 2011 Final Final (2)

1/15

1

CENTRAL BANK OF NIGERIA

GUIDELINES ON POINT OF SALE (POS) CARD ACCEPTANCE SERVICES


2/15

2

GUIDELINES ON POINT OF SALE (POS) CARD ACCEPTANCE SERVICES

1 PreambleIn exerc ise of the p ow ers c onfe rred on the Bank by Sec tion 47 (3) of the

Central Bank of Nigeria Act 2007 (as amended) to issue guidelines for the

ma intenanc e of a de qua te a nd rea sonab le financ ial servic es for the p ublic andto e nsure high stand ards of c ond uct a nd m ana ge ment throughout the b anking

system; and

Pursuant to its inherent powers, the Central Bank of Nigeria (CBN) hereby issues

the following guid elines for Point of Sa le (POS) Ca rd Ac c ep ta nc e Services in

Nigeria:

Objectives

These g uidelines have been d eve loped to provide m inimum standards and

req uirem ents for the op eration of POS c ard a c cep tance servic es unde r the

following POS env ironm ent :

a ) Countertopb) Wireless/ Porta b lec ) Hand ove r (PIN Entry only/ Custom er-ac tivat ed with PIN Entry)d ) Auto ma ted Dispenser (e.g . Automa ted Fuel Dispenser, Token d ispenser,

etc)

e) Biome tric point o f sa lef) Contactless

2 Point of Sale Ca rd Ac cep tanc e Services Stakeho lde rsPOS Ca rd Ac c ep tanc e Services Stakeholders include b ut not limited to:

1. Merchant Acquirers2. Card Issuers3. Merchants4. Cardholders5. Ca rd Sc hem es and Ca rd Assoc iations6. Switche s7. POS Termina l Owners8. Payme nts Terminal Service Ag gregato r (PTSA)9. Payments Termina l Service Providers (PTSP)10. Proc essors

3 Minimum Stand ardsAll industry sta keho lders who p roc ess and / or sto re ca rdhold er informa tion sha ll

ensure tha t the ir termina ls, ap p lic a tions and p roc essing systems c om ply with the

minimum req uirem ent s of the fo llow ing Sta nd ards and Best Prac tice s (for PCI,

the minimum req uirem ent w ill be leve l 2.1). In add ition, a ll termina ls,

applications and processing systems, should also comply with the standards

specified by the various card schemes. Each vendor must provide valid

certificates showing compliance with these standards, and must regularly

review status of all its terminals to ensure they are still compliant as standards


3/15

3

c hange . There will be a c ontinuous review and rec ertific ation on com p liance

with these a nd othe r globa l industry standards from time to time.

3.1 PA DSS Payment App lic a tion Da ta Sec urity Sta nda rd .3.2 PCI PED Payme nt Ca rd Ind ustry Pin Entry Device.3.3 PCI DSS Payme nt C ard Industry Dat a Sec urity Sta nd ard.3.4 Triple DES Dat a Enc ryp tion Sta nd ards should be the benc hma rk for all da ta

transmitted and authentica ted be twe en e ach party. The trip le DES a lgorithm is

the minimum standard.

3.5 EMV The dep loyed infrastructure m ust c om ply with the minimum EMVrequirements.

3.6 Each vendor must provide valid certificates showing compliance with thesestandards.

The timelines for comp lianc e with the above minimum stand ards are as follows:

New terminals and pa yment ap plica tions Imme diate Existing payment app lic at ions Dec em ber 1, 2011 Existing te rminals Dec em ber 31, 2012

4 Roles and Responsibilities of:4.1Merchant Ac quirers4.1.1 Only CBN licensed financial and non- financial institutions shall serve as

Mercha nt Acquirers.

4.1.2 Mercha nt Ac quirers c an ow n POS Terminals, but sha ll only de p loy and supportPOS te rminals throug h a CBN licensed Pa yme nt Termina l Services Provider

(PTSP).

4.1.3 Mercha nt Ac quirers shall ensure tha t POS terminals purc hased and dep loyed atmerc ha nt/ reta iler loc a tions through CBN lice nsed Payment Termina l Servic es

Provide r sha ll acc ep t a ll c a rds (c a rd agno stic)

4.1.4 Support for existing POS te rmina ls a lrea dy de p loyed sha ll be ha nd ed ove r toPTSPs by No ve mber 1st, 2011

4.1.5

Merchant Acquirers shall enter into agreements/contracts with merchants forac c ep ting payment by mea ns of electronic pa yment instrument. All

agreements/contracts shall clearly spell out the terms and conditions, including

roles, responsibilities and rights of the a cquirer and the m erchant. The c ont rac t

should also clearly spell out requirements for the merchants responsibilities in

ensuring p rop er upkee p of the POS te rmina l.

4.1.6 Every Merc hant Ac quirer sha ll connec t a ll its PoS termina ls or other acquiringdevic es d irec tly to the Payme nts Termina l Service Aggreg ato r.


4/15

4

4.1.7 Merchant Acquirers shall switch all domestic transactions through the preferredlocal switch of their choice for purpose of seeking authorisation from the

relevant Issuer.

4.1.8 To a c hieve inte rop erab ility, a ll POS termina ls dep loyed in Nigeria sha ll ac c ep t a lltransactions arising from any card issued by any Nigerian bank. Accordingly,Acquirers and other service providers shall be card neutral entities that have no

rea son to promote or favo ur any c ard b rand over the other.

4.1.9 Every acquirer must be able to accept all cards issued by Nigerian Banks,whether through a direct license or via an arrangement with any other acquirer

tha t is lic ensed unde r the relevant c a rd schem e/ assoc iation.

4.1.10 Merc ha nt Ac quirers, in c onjunc tion w ith their Payment Terminal ServiceProviders, shall be responsible for ensuring that merchants are trained and

made to put in place reasonable processes and systems for confirming

cardholder identity and detecting suspicious or unauthorized usage of

electronic payment instruments where customer/card is physically present at

po int of sa le.

4.1.11 Merchant Acquirers shall be required to undertake measures to prevent the useof their networks for purposes associated with money laundering and other

financial crimes.

4.1.12 Mercha nt Ac quirers sha ll c ond uc t p rope r KYC o n a ll their mercha nts w ith POS.4.1.13 Merchant Acquirers shall set merchant limits based on the volume of

business/type of commercial activities. In addition, Merchant Acquirers shall

provide guidelines to merchants on payment procedures for large tickettransac tions (e.g. review of Identifica tion, et c )

4.1.14 All POS Termina ls p roc ured should a llow for imp leme nta tion o f Biome tricAuthentication by December 2015.

4.1.15 Merchant Acquirers shall in conjunction with banks, switches and otherstakeholders ensure resolution of disputed transactions between the merchant

and the cardholder within five (5) working days. All transactions from POS

devic es sha ll be routed through the PTSA to the releva nt ac quirer or its

app ointed third p arty proce ssor.

4.1.16 There sha ll be no exclusivity a rrangem ent s tha t bund le third party p rocessingwith switching ac tivities. Eac h ac quirer sha ll be free t o p roc ess transac tions onits own, or leverage the services of a third party processor; and these services

shall be indep end ent of the switc h used to fac ilitate such excha nge .

4.1.17 Merchant Deposit Banks shall maintain and reconcile merchant accounts onbeha lf of Mercha nt Ac quirers.


5/15

5

4.2 Paym ent Term ina l Servic es Provider (PSTP)4.2.1 To ensure effec tiveness of POS op erations and a prop er supp ort/m a intenanc e

infrastruc ture, only CBN lice nsed Payme nts Termina l Service Providers sha ll

dep loy, ma inta in and p rovide supp ort for POS te rmina ls in Nigeria . PTSPs sha ll

offer servic es to ac quirers c overing a ll aspe c ts relating to terminal m anag em ent

and support, including but not limited to purchase and replacement of spareparts, provision of connectivity, training, repairs, and development of value-

ad ded servic es, am ong st o ther things.

4.2.2 PTSPS sha ll agree the ir fee s d irec tly with the a c quirers, but sub jec t to thefollowing guidelines:

1) A fla t fee per terminal, irrespec tive of loc a tion dep loyed a nd / or

value/volume of transactions

2) An inc entive fee b ased on vo lume of transac tions pe r terminal

3) Timely set tleme nt of p ayments

4.2.3 CBN sha ll license a limited num ber of Paym ents Termina l Service Prov iders, toenab le the PTSPs b uild sc a le a nd ma ximize e ffic ienc y. Criteria fo r PTSPs sha ll be

defined by CBN, and the performanc e o f lic ensed PTSPS sha ll be review ed

annua lly to co nfirm they mee t de fined p erforma nc e ta rge ts. Licenses of PTSPs

that fail to meet performance expectations can be withdrawn and fresh

lic enses issued to qua lifying c om panies.

4.2.4 PTSPs c an ident ify me rc hant op portunities and m arket p ote ntial merchants onbe half of a c quirers.

4.2.5 Only PSTPs sha ll be a llowed to d ep loy POS te rmina ls. Any pa rty, other tha n aPTSP tha t d ep loys POS te rmina ls, sha ll be fined 50,000 Na ira per day tha t

te rmina l rema ins dep loyed . PTSPs sha ll c lea rly agree SLAs on dep loym ent

timelines w ith ac quirers to ensure efficien t d ep loyment o f POS termina ls.

4.2.6 PSTPs sha ll ensure tha t d ep loyed POS te rmina ls a re func tiona l at a ll time s.Appropriate mechanism must be put in place to remotely detect failures which

sha ll be rec tified or rep lac ed w ithin 48 hours.

4.2.7 All termina ls dep loye d by PTSPs must ha ve stic kers w ith the PTSPs sup port servicec ontac t informa tion. In add ition PTSPs must have a support infrastructu re that

ensures supp ort coverag e fo r mercha nts 7 da ys a we ek.

4.2.8 PTSPs will be required to ente r into c on trac ts/ SLAs w ith the acquirers tha t w illclearly state the terms and conditions of their support services, including the fee

struc ture and timeline for fee settleme nt.

4.2.9 PTSPs sha ll work with the PTSA to ensure a ll POS te rmina ls dep loye d by themmeet all req uired c ertificat ions and the minimum POS spec ifica tions de fined in

these gu ide lines.

4.2.10 PTSPs sha ll work with a cquirers and the te rminal ma nufa c turers to ensure tha tterminals are phased out/replaced/upgraded as appropriate, as their

certifications become obsolete.

4.2.11 No Ca rd Sc hem e sha ll eng age in business as a Payment Termina l ServicesProvider; neither shall any entity that has a management contract with a Card


6/15

6

Scheme e ng age in business as a Paym ent Termina l Services Provider. In

add ition, no e ntity in which a Ca rd Schem e, its subsidiary, or the m a jority

shareholder of a card scheme, has 20% shareholding or more shall engage in

business as a Payme nt Termina l Services Provider. In ad d ition, no sing le Bank

sha ll ha ve a cont rolling sha re in any Payment Termina l Services Provider

4.3 PoS Term ina l Owner4.3.1 Banks, Me rcha nts, Ac quirers, PTSA, a nd PTSPs c an be PoS Term ina l Ow ners.4.3.2 PoS Termina l Owners sha ll ensure a ll POS te rmina ls p roc ured by the m a re

c om pliant w ith the minimum POS spec ifica tions.

4.3.3 PoS Termina l Owners sha ll cove r the c osts of rep a irs and rep lac em ents of p a rtsfor the ir te rmina ls.

4.4Payme nts Termina l Service Ag greg ato r

4.4.1 Nige ria Inte rba nk set tlem ent Systems (NIBSS) - owned by all Nigerian b anks andthe Central Bank of Nige ria sha ll ac t a s the Payments Termina l Servic e

Aggrega tor for the financ ial system .

4.4.2 As the Payme nts Termina l Service Ag grega to r for the industry, NIBSS sha llesta b lish c om munic a tion ne twork for reliab le POS da ta traffic tha t sha ll sa tisfy

the service a nd availability standards and expec tat ions of the industry on a c ost

effec tive b asis.

4.4.3 As the Payme nts Termina l Service Aggrega to r for the industry, NIBSS sha ll on a nannual basis or more frequently as may be required, on behalf of the industry

c ertify POS Terminals tha t m ee t the POS Terminal sta nda rds app rove d for the

industry.

4.4.4 As the Payme nts Termina l Service Ag gregato r, NIBSS sha ll partic ipa te o n a jo intcommittee of industry stakeholders, to negotiate a price list with 2 3 terminal

eq uipment p roviders for bulk purchase o f POS termina ls for the Nigerian m arket.

It is expected that a bulk purchase agreement will enable cost reduction on

POS termina ls, as well as the ab ility to define spec ial requirements for the

Nigerian market, and ensure a sufficient support infrastructure from the terminal

ma nufac turers. Any Termina l Owner ma y subsc ribe to the nego tiated glob al

p rice list for the p urc hase o f POS Terminals to take advanta ge o f these b ene fits.

4.4.5 As the Payme nt Termina l Service Aggrega to r, NIBSS sha ll be the only ent itypermitted to op erate a Termina l Ma nagem ent System . All POS te rmina lsop erating in Nige ria must b e c onnec ted to the Paym ent Termina l Service

Aggreg ator. This is to ensure com prehe nsive oversight, rep orting/ performanc e

monitoring, and also in line with our objectives of shared industry infrastructure

and b est prac tice. NIBSS sha ll p rovide Ac quirers and Paym ent Termina l Service

Provide rs and their merc hant s (where required ) the ab ility to view transac tions

and monitor pe rforma nc e of their de vices.

4.4.6 All PoS Termina ls de p loyed shall be te c hnica lly enab led to ac c ep t a ll ca rdsissued by Nigerian banks.


7/15

7

4.4.7 The Paym ents Termina l Service Ag gregato r sha ll route a ll transac tions from PoStermina ls to the releva nt Ac quirer or its designa ted third pa rty p roc essor. This

enables Acquirers who are Issuers to handle On-Us transactions appropriately

and all Acquirers to manage their risks and accept responsibility for such

transac tions in line w ith Cha rge-bac k Rules of releva nt C ard Schem es. This doe s

not p rec lude any Ac quirer from using the services of any Third Pa rty Proc essor(TPP) or the Ac quirer s in-house p roc essing services to p rocess its acquired

transactions.

4.4.8 All dom estic transac tions includ ing but not limited to POS and ATM transac tionsin Nigeria must be switched using the services of a local switch and shall not

under any circumstance be routed outside Nigeria for switching between

Nigerian Issuers and Ac quirers.

4.4.9 The Payments Termina l Servic e Aggreg ato r sha ll monitor the ava ilab ility andtransac tion traffic on a ll POS te rmina ls on a cont inuous basis and sha ll p rovide

analysis and rep orting on POS terminal pe rforma nc e and transac tion trend to

the Cent ral Bank a nd the industry.

4.4.10 The Pa yments Terminal Service Aggreg ato r sha ll ensure a ll me rcha nts and otherrelevant p arties a re settled within the T+1 settlement p eriod , upon rec eipt of

settleme nt repo rts from all ca rd schem es or the switches they ha ve a ppo inted

to provide suc h rep orts on their beha lf. Fa ilure to exec ute the T+1 sett lement

c yc le sha ll result in a sanc tion to the PTSA, inc luding but no t limited to them

solely refund ing the entire Mercha nt Service Cha rge for that da ys transac tions.

4.4.11 The Payme nts Terminal Servic e Aggreg ator sha ll have c lear Servic e Leve lAgreements for certifying terminals quickly and efficiently, as well as for

integ ra ting new va lue-ad ded servic es on beha lf of ac quirers, PTSPs, or 3rd party

ap plica tion de velop ers.

4.5Card Issuers4.5.1 Only licensed deposit taking banks shall with the approval of CBN serve as the

issuers of payment cards.

4.5.2 Only EMV-c om pliant c ards sha ll be issued by Nigerian b anks.4.5.3 Dep osit Taking Banks sha ll ac t a s the issuer of p ayment c a rds and by so d oing

com mit them selves tow ards the c ardho lders to settle the op erations pe rformedby me ans of pa yment c ards, and the c a rdho lder com mits himself/he rself to p ay

the amount of the operations together with charges due to the issuer from a

spe c ified a c c ount.

4.5.4 A card issuer shall be held liable (where proven) for card frauds arising fromc ard skimming or other co mp romises of the issuers sec urity system, inc lud ing

pa yment d one w ith hot-listed c ard.

4.5.5 A card issuer shall put in place adequate controls to prevent, track andminimize fraud .


8/15

8

4.5.6 A card issuer shall provide means whereby its cardholders may at any time ofthe d ay o r night notify the loss, theft or fraudulent use o f the c ard a nd the c a rd

issuer sha ll ta ke a ll nec essary step s to stop any further use o f the a ffec ted c a rd .

4.5.7 A card issuer shall keep sufficient internal records over a minimum period of ten(10) years to enable audit trails on card-related transactions.

4.5.8 A card issuer must have a capacity to reflect customers preferences on theusag e of his c ard.

4.5.9 A card issuer shall ensure that all hot-listed cards are system driven across allchannels.

4.5.10 A card issuer shall be responsible for any loss arising from any use or operation ofa c ard a fter the c a rd ha s be en repo rted lost or stolen.

4.5.11 Card issuers shall be responsible for setting overall transaction limits on cards perday, and transaction limits of such cards by channel, according to their card

prod uc ts and risk guidelines.

4.5.12 Card issuers, who provide offline limits for their card products, shall ensure theterms for such offline limits are fully understood and agreed with the customer.

Irrespective of the status of the cardholders account as at the time of the

transac tion, the ca rd issuer sha ll be liab le to settle the am ount to the m ercha nt,

while it takes the appropriate measures to recover the funds from the

cardholder.

4.5.13 No ca rd issuer or its age nt sha ll deliver any card in a fully ac tivated sta te.4.5.14 No card issuer or its agent shall bill or charge a customer for an unsolicited card

unless and until afte r the c ard is fully ac tivated by cardho lder.

4.5.15 No card issuer or its agent shall engage in the use of unethical tactics whenma rketing its c ard p rod uc ts to m emb ers of the p ublic.

4.5.16 No card issuer or its agent shall communicate false or misleading informationregarding card terms and conditions, service fees/waivers, and/or associated

promotions/gifts/prizes to members of the public.

4.5.17 Card Issuers shall respond to Card related disputes or complaints fromcardholders within 24 hours and in conjunction with the Acquirer resolve such

d isputes or com plaints within five (5) working days.

4.5.18 A c a rd issuer must furnish its c ardholders w ith a d eta iled list o f c ont rac tua l termsand c ond itions prior to a c tivation. Such te rms shall inc lude a t a minimum :

Fees and cha rges

Withd raw a l limits (inc luding offline transac tion limits and terms where

applicable)

Billing c ycles

Terminat ion proc ed ures

Default/reco very proce dures

Loss/ theft/ misuse of c ard proc ed ures


9/15

9

Grievanc e/ Comp laints proced ures

4.5 Mercha nts

4.5.1 A merchant shall enter into agreement with Merchant Acquirer specifying inc lear terms the ob liga tions of ea c h pa rty.

4.5.2 Merchant shall ac c ept ca rds as a method of p ayme nt for go od s and servic es.4.5.3 A merchant may refuse to accept payment by means of an electronic

paym ent instrument , including pa yment w ith c ards, if:

a ) The e lec tronic p ayment instrument is invalid;b ) Notification of loss, missing, stolen or damaged has been made of the

elec tronic p ayment instrument;

c ) The c ardho lder refuses to present a doc ument c onfirming his/ her identityin the event of suspicious / unauthorized use of electronic payment

instruments.

4.5.4 The m ercha nt shall display the p ayment de vice c onsp icuously eno ugh fo r thecardholder to observe the amount entered into the device before the

c ardholder ente rs his/ her PIN.

4.5.5 The m ercha nt sha ll be he ld liab le for fraud s w ith the c a rd a rising from itsnegligenc e, connivance etc.

4.5.6 A me rc hant shall unde r no c ircumstanc e c ha rge a d ifferent p rice, surc harge acardholder or otherwise discriminate against any member of the public who

c hooses to p ay with a ca rd o r by ot her elec tronic m ea ns.

4.6 Cardholders4.6.1 A c a rdho lder shall:

a ) Store the p aym ent c ard a nd p rotec t his PIN with due c areb ) Not keep his pa yment c ard to ge ther with the PINc ) Notify the issuer without delay about missing, stolen, damaged, lost or

destroyed card

d ) Not make ava ilab le the paym ent c ard to unauthorized pe rsons.4.6.2 The c ardholder may withdraw from the c ontrac t for pa yment c ard w ithout

prior notice to the issuer provided he does not owe for any charges or

transac tions on the pa yment c ard.

4.6.3 The c a rdho lder shall present, when required by a merc hant , a d oc umentc onfirming his identity.

4.6.4 The c ardho lder sha ll rec eive va lue fo r the o perations pe rformed by mea ns of apa yment c ard, and by so d oing, the holder co mmits himself to p ay the a mount

of the operations together with charges due to the issuer from a specified

account.

4.6.5 The c a rdhold er sha ll be held liab le for fraud c om mitted w ith his ca rd a risingfrom the misuse of his PIN or his c ard.


10/15

10

4.6.6 The c a rdho lder sha ll be entitled to rec eive a rec eipt o r any other form o fevidence a t the time a transac tion is pe rformed w ith his/ her ca rd

4.6.7 The c ardho lder shall be entitled to rec eive, within a rea sona ble p eriod , at leastmonthly, a sta tem ent o f a ll transac tions performed with his/ her ca rd

4.6.8 If a cardholder notifies his bank that an error involving his card has occurred,the institution must investiga te a nd resolve the c laim w ithin 3 working days.

4.6.9 The c a rdho lder sha ll be given rea sona ble notice b efore cha nge s are ma de tofees levied on his/her card and be given the option to discontinue usage of

c ard to avoid such c hang es in fees without pena lty

4.6.10 A cardholder shall be given reasonable notice before changes are made tothe terms and conditions of his card contract and shall be given the option to

op t-out of the c ard co ntrac t without pena lty

4.6.11 The c ardho lder shall be entitled to p rivac y and information o n his c ardac c ount c annot b e sha red with third parties unless:

a ) With express c ustom er ap p rova l orb ) In cases of customer default, where information can be shared with credit

burea us and co llec tion/ rec overy age nts or

c ) In cases where information is requested by valid order of a competentNige rian c ourt/a uthority or

d ) In c ases where it is nec essa ry to p reve nt fraud 4.7 Card Assoc iations and Card Scheme s4.7.1 All ca rd assoc iations and c a rd sc heme s doing b usiness in Nige ria a re b ound by

these guide lines and o the r releva nt CBN guide lines/ c irculars.

4.7.2 To ensure fair play a nd eq ual opp ortunity for all players, each C ard Sc hem e shallma ke public and transpa rent, ob ject ive rules for mem be rship of the said sc hem e

and estimate d time required for certific at ion.

4.7.3 CBN sha ll reserve the right to assess the rules to c on firm o b jec tivity, vis-a-visinternat ional standa rds/ be st p rac tice. Any Ca rd Sc hem e that wrongfully de nies

membership or unnecessarily delays the process of certification to potential

players, would b e p ena lized by C BN including b ut not limited to p aying a fine

equivalent to the expected revenue of the payment services provider for that

period, suspension and/or revocation of license, and CBN licensing new

schemes.

4.7.4 No Ca rd Sc hem e sha ll eng age in the b usiness of a c quiring; neither sha ll anyentity that has a management contract with a Card scheme engage in the

business of ac quiring. In ad d ition, no ent ity in which a Ca rd Sc hem e, its

subsidiary, or the majority shareholder of a card scheme, has 20% shareholding

or more sha ll eng age in the b usiness of a c quiring.

4.7.5 No Ca rd Assoc iation or Ca rd Sc heme shall enga ge in any a ntitrust a c tivity or anyac t that w ill lead to a buse of dom inant po sition, monop oly or unfair c om petition.

Accordingly, there shall not be any form of arrangement or collusion between


11/15

11

tw o o r mo re C ard Assoc iations, Card Sc hem es, or Payme nt Sc hem es in respec t

of Issuing , Ac quiring, Proc essing or Switc hing.

4.8 Switching Com pa nies4.8.1 All local switches in Nigeria shall ensure that transactions relating to all cards

issued by Nigerian banks are successfully switched between Acquirers and

Issuers.

4.8.2 To a c hieve the interconnec tivity of a ll new and existing switc hing c om pa nies, allswitching companies shall open their networks for reciprocal exchange of

transac tions/ me ssages w ith the Nigeria Central Switch a nd Payment Termina l

Servic e Agg reg a tor.

5. Settlement Mec hanism

5.1 The settleme nt for a ll POS transac tions must be d one to the mercha nt ac c ount

on T + 1 b asis, whe re T is the da te the transac tion is performed .

5. 2 Ca rd sc hem es or the ir appointed switc hes sha ll p rovide the ir sett lement rep orts

to NIBSS by 10am for the p revious day. The set tlem ent informa tion should

c onta in suffic ient deta il to ena ble NIBSS c red it mercha nt a c c ounts direc tly, and

sha ll be p rovided in a forma t as advised by NIBSS. Fa ilure to p rovid e this

information in the required format or by the required timeline will result in a

sanction, including but not limited to the offending party solely refunding the

entire M ercha nt Servic e C ha rge for that da ys transac tions.

5.3 NIBSS sha ll a lso d irec tly c red it the ac c ounts of ot her parties with the ir sha re of

the m ercha nt servic e c harge (MSC).

5.4 NIBSS will be pa id by the ba nks for the sett lement done to the merc ha nt

ac count in line with the NEFT fee transac tion c harges.

6. Fees and Cha rges

6.1 Fees and c harges for POS Ca rd Acc ep tanc e servic es a re to be agreed

be tween service p rovide rs and ba nks / entities to w hic h the services are b eing

provided subjec t to the follow ing limits:

The ma ximum tota l fee tha t a m ercha nt sha ll be c harged for any POStransac tion sha ll be 1.25% of the transac tion va lue subjec t to a ma ximum of

N2, 000.00.Exceptions may apply in respect of travel and entertainment

merchants including but not limited to hotels, restaurants, airlines, etc. In

which c ase shall be at such rate as ag reed from time to time be twee n the

Ac quirer and the M erchant. Under NO CIRCUMSTANCE sha ll a m erchant

c ha rge a surc ha rge to c ustomers for using the ir ca rds.

The fee s and c ha rge s sta ted ab ove a re a pp lic ab le to only POS transac tionspe rformed with na ira d enom inated c ards. POS transac tions do ne w ith ca rds


12/15

12

issued in foreign currencies will still follow the pricing arrangement put in

place by the relevant international card association/scheme.

6.2 Fee s c ha rged a t on POS Termina l transac tions sha ll be sha red a s follow s:i. Issue r - 30.0%ii. Ac q uirer - 32.5%iii. Payme nt Termina l Ow ner - 25.0%iv. Loc a l Switc h - 5.0%v. Payment Terminal Servic e Aggreg a tor - 7.5%

The Fee sched ule will be reviewe d a nnua lly.

7. Transition to Ac hieve Interoperab ility

Prior to Dec emb er 1, 2011 and the e ffective d at e for the new a rrang em ents, all

c om me rcia l sw itc hes, proc essors or en tities d riving PoS te rmina ls in Nigeria sha ll

ensure full and sec ure c onnec tion to the Cent ral Switch a nd all transac tions in

respec t o f any c ard tha t the switc h, proce ssor or other entity is not lic ensed to

proc ess or switch sha ll be routed t hrough t he NCS to a licensed switc h or

processor for purpose of processing such transaction on behalf of the relevant

Ac quirer for seeking autho risa tion from the releva nt Issuer.

All te rminals must be p lugg ed to into NIBSS Plc , the PTSA on or be fore Novemb er

15, 2011.

8. Exc lusivity Agreem ents

There sha ll be no form o f exclusivity in any a rea of p ayme nt servic e inc luding

but not limited to Issuing, Acquiring, Proc essing, and Sa le and Ma intena nc e of

hardware and software. It shall be the responsibility of every Card

Assoc iation/ Payment Sc hem e a nd othe r relevant p a rties to ensure t ha t a llexisting exclusivity cont rac ts a re a mend ed not la ter than Sep temb er 30, 2011 to

ensure conformity with these guidelines and other regulations.Any payment

scheme, operator, processor, infrastructure provider, switching company,

service provider or bank that contravenes this policy may be suspended for a

minimum of one (1) month by the CBN as a payment service or payment

infrastructure service provider in the first instance, to be followed by stricter

sanc tions if the p rac tice persists.

9. Minim um POS Terminal Spec ifica tions

Parameters Specifications

Ca rd Rea ders EMV Chip / Sma rt c ards, Ma gnet ic stripe. Op tiona l

Communications

: Contactless reader,2 SAM Slots

GPRS, Ethe rnet , Dia l-up Modem . Op tiona l

Certifications

: CDMA, Wi-Fi

EMV levels 1 & 2, PCI DSS, PA-DSS, PCI PED online & offline (All PCI

c ertifica tions should be Level/ Version 2.1 minimum)

Biometric Upg rad ea ble to incorpo rat e finge rp rint rea der/sc anne r

SIM capac ity Must op erate eithe r a dua l SIM or a roa ming SIM

CPU ARM9/ 11, 32Bits. Optiona l

Memory

: Dual processors

16MB Flash, 32MB SDRAM

Keyp ad PCI PED Approved , Backlit

Disp lay TFT LCD grap hics, 128/ 64 p ixel, Bac klit. Op tiona l: Co lour sc reen


13/15

13

Pow er 100-240V, 50-60Hz; 24hrs ba tte ry pow er (op era ting) Op tiona l

Printer

: DC

supp ort, Ca r jac k cha rge r, Doc king fa st c ha rge r

15 -18 lines per sec The rma l printe r

Multi-App lic at ion Supp orts Multiple App lica tions

Customization /

Others

Op tiona l: Co loured or branded housing, Labelling / em bossing, RS232 &

USB interfac es, Protoc ol imp lementa tion

Existing POS te rmina ls tha t d o not com p ly with the sta ndards set in these guid elines sha ll

be pha sed out b y Dece mb er 31, 2012.

10. Com plianc e

All parties shall comply with the provisions of these guidelines and other relevant

guide lines issued by the CBN. This guide line sha ll p reva il in the case o f co nflic t with a ny

guide lines issued prior.

10. Timelines

The d ea d lines for co mp lying w ith the g uide lines as sta ted in this doc ument shall be on

or before the follow ing da tes:

Com plianc e w ith minimum standa rds:

New terminals and pa yment ap plic ations Imme diate Existing payment app lic a tions Dec em ber 1, 2011 Existing te rminals Dec em ber 31, 2012

Provision of sc heme rules and certific at ion time lines Sep temb er 1, 2011

Com plianc e with new settleme nt arrange ment Oc tob er 1, 2011

Sp in-off/ Ind ep end enc e of Ca rd Sc hem es Ap ril 1, 2012

Hand over of existing te rmina ls to PTSPs Novem ber 1, 2011Plug-in of existing te rmina ls to NIBSS November 15, 2011


14/15

14

Appendix 1: Definition of Terms

The te rms below sha ll have the following me aning for the p urpose o f those Guide lines.

a ) Merchant Acquirer means a CBN licensed financial or non-financial institutionthat ha s ag reem ent with the relevant ca rd sc heme to c ontrac t with merc hantsto a c c ep t p ayment ca rds as mea ns of pa yment for good s and service s.

b ) Cardholder means any person to whom a payment card is issued and whoseaccount will eventually be debited for settlement of transactions performed

with the pa yment card.

c ) Dep osit Taking Banks me ans banks and other financ ial institutions.d ) Merchant means an organization or entity that contracts with a Merchant

Acquirer for accepting payment by means of payment card or any other

elec tronic p aym ent instrument .

e) Operations include facilitation of funds transfer, effecting payment and suchother transactions that may be determined from time to time by means of an

elec tronic p aym ent instrument .

f) Interoperability means ability to issue cards and deploy devices in such a waythat all customers (card holders, merchants and issuers) perceive operations,

while ob ta ining servic e, as if the interconnec ted netw orks we re o ne.

g) Interconnectivity means ability for reciprocal exchange oftransac tions/ message s b etw een tw o or mo re switc hing ne two rks.

h) PIN me ans Persona l Identifica tion Num ber.i) Competent Authorities include Courts, Economic and Financial Crime

Commission (EFCC), Independent Corrupt Practices Commission (ICPC),

Regulatory Authorities such as the CBN, Nigeria Deposit Insurance Commission

(NDIC) e tc .

j) Hot list mea ns list of d ea c tivate d ca rds tha t were reported missing, stolen , lost o rda mag ed by the c ard holders.

k) Switc h m ea ns a system tha t switches c ard paym ents message s betw eenacquirer (or ac quirer proc essor) and issuer (or issuer p rocessor)

l)

Ca rd Sc hem es define the rules of the c ard system (e.g. interchanges, lice nses,fraud responsibilities), and choices of technical functionalities (e.g. standards,

p roto c ols, sec urity requirem ents)

m) Processor processes card transactions.n) A Card Association is a network of issuing banks and acquiring banks that

p roc ess pa yment c ards of a spe c ific brand .

o) EMV (Europay, MasterCard, Visa) is the global standard that is helping ensuresma rt (Chip -and -PIN) ca rds, terminals and other systems c an interop erate.


15/15

15

p) PCI DSS sta nd s for Payment Ca rd Industry Data Sec urity Sta nd ard. It wasdeveloped by the major credit card companies as a guideline to help

organiza tions tha t proc ess ca rd p ayments p revent c red it c ard fraud a nd va rious

other sec urity vulnerab ilities and threa ts.

q ) PCI PED security requirements are designed to secure personal identificationnumb er (PIN)-based transac tions glob a lly and ap p ly to d evice s that ac c ep t PIN

ent ry for a ll PIN b ased transac tions.

r) PA-DSS sta nd s for Payment App lic a tion Dat a Sec urity Sta nd ard. PA-DSScompliant applications help merchants and agents mitigate compromises,

prevent storage of sensitive cardholder data, and support overall compliance

with the PCI DSS.

CENTRAL BANK OF NIGERIA

2011.

pos guidelines august 2011 final final (2)

Documents