cbn sets limit on online transactions and contactless payments

CBN Sets Limit On Online Transactions And Contactless Payments

The Central Bank of Nigeria (CBN) has introduced new guidelines and restrictions on contactless payments in the country. 

In two circulars issued by the CBN’s Director of Payments System Management Department, the bank outlined measures to standardize operations and encourage the use of innovative payment options while ensuring financial system stability.

The guidelines direct that contactless payments, which involve transactions without physical contact between the payer and the acquiring device, are suitable for safe and efficient low-value and large-volume payments. 

To manage the associated risks, participants in contactless payments are required to implement appropriate risk management processes and adhere to relevant standards.

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As part of the guidelines, the CBN has set a transaction limit of N15,000 (Nigerian Naira) for contactless payments made through accounts and wallets. 

Additionally, there is a cumulative daily limit of N50,000 for such transactions. Any transaction exceeding the N50,000 limit will require biometric verification and other forms of authentication.

The CBN emphasized the need for strict compliance with these guidelines by all banks, financial institutions, and payment service providers. 

It stated that higher-value contactless payments, which exceed the daily limits, must undergo additional verification and authorization, following existing KYC (Know Your Customer) requirements and limitations on electronic payment channels. 

Transactions above the restricted daily cumulative limit will be conducted using contact-based technology.

These restrictions on contactless payments are part of a series of recent changes introduced by the CBN to strengthen financial transactions in Nigeria. 

In another directive, the CBN instructed banks and financial institutions to obtain customers’ social media handles as part of their KYC requirements to enhance customer identification. 

The aim is to improve the accuracy and depth of customer information for better due diligence.

The CBN’s new guidelines and restrictions on contactless payments will ensure the secure and efficient conduct of financial transactions in Nigeria. It may also maintain the stability of the financial transactions and systems across the country.