Nigeria: CBN Implements New Limits on Contactless Transactions

The Central Bank of Nigeria (CBN) has introduced guidelines that impose limits on contactless payments in the country, according to two circulars issued by the CBN’s Director of Payments System Management Department, Musa Jimoh.

The first circular provides guidelines for banks, financial institutions, and payment service providers regarding contactless payments. It emphasizes the CBN’s commitment to standardizing operations in the payments system while promoting the deployment of innovative products and maintaining financial system stability. Contactless payment, which enables transactions without physical contact between the payer and the acquiring device, is recognized as an innovative and secure payment option for low-value and high-volume transactions. The guidelines aim to ensure that participants in contactless payments implement appropriate risk management processes and adhere to relevant standards.

The CBN’s second circular introduces transaction limits for contactless payments in Nigeria. It states that there is a transaction limit of N15,000 for contactless payments through accounts/wallets. Additionally, there is a daily cumulative limit of N50,000. The circular highlights the risks associated with contactless payments and clarifies that transactions exceeding these limits will require verification and authorization. Higher-value contactless payments, which exceed the daily limits, will necessitate appropriate verification and authorization, following the existing know your customer (KYC) requirements and limits on electronic payment channels. Transactions surpassing the stipulated daily cumulative limit will be conducted using contact-based technology.

The CBN emphasizes the importance of strict compliance with these guidelines for all banks, financial institutions, and payment service providers. The implementation of these limits aims to strike a balance between promoting the adoption of contactless payments and safeguarding against potential risks, thereby ensuring the security and stability of the Nigerian payment system.