Nigeria: CBN Directs Banks and Fintechs to Fully Implement ISO 20022 and Geo-Tagging of Payment Terminals

The Central Bank of Nigeria (CBN) has issued a directive mandating all financial institutions and payment service providers to complete the migration to the ISO 20022 messaging standard and adopt compulsory geo-tagging of payment terminals by October 31, 2025.

The directive, contained in a circular dated August 25, 2025, and signed by Dr. Rakiya O. Yusuf, Director of the Payments System Supervision Department, underscores the apex bank’s drive to modernize Nigeria’s payment infrastructure, strengthen oversight, and align with global standards.

According to the circular, the policy applies to Deposit Money Banks (DMBs), Microfinance Banks (MFBs), Mobile Money Operators (MMOs), Switching and Processing Companies, Payment Terminal Service Providers (PTSPs), Payment Solution Service Providers (PSSPs), and Super Agents. All payment messages, whether domestic or international, must comply with ISO 20022 specifications.

ISO 20022, developed by the International Organization for Standardization, has become the global benchmark for financial messaging. It replaces legacy formats with richer, structured, and data-driven messages, in line with SWIFT’s global adoption roadmap. The CBN emphasized that financial institutions must accurately capture and exchange critical data elements such as payer and payee identifiers, merchant and agent details, and transaction metadata.

In addition, the CBN has made geo-tagging of all payment terminals, including Point-of-Sale (PoS) devices, mandatory. The initiative is aimed at tackling fraud, enhancing regulatory visibility, and improving mapping for financial inclusion.

The circular specifies that:

• All existing terminals must be geo-tagged within 60 days of the directive.
• Newly deployed devices must be geo-tagged before certification and activation.
• Terminals must support native geolocation services using dual-frequency GPS receivers and run on Android OS version 10 or higher to ensure compatibility with the National Central Switch’s monitoring system.
• Each terminal must be registered with a Payment Terminal Service Aggregator (PTSA) and tied to precise merchant coordinates.
• Geo-location data must be captured at the point of transaction and embedded in payment messages as a mandatory reporting field.

The CBN also stated that terminals not routed through a PTSA will be prohibited from transacting. Validation checks will begin on October 20, 2025, ahead of the compliance deadline. Institutions that fail to comply risk sanctions or exclusion from the national payments ecosystem.

Industry experts note that ISO 20022 offers significant benefits, including improved fraud detection, faster cross-border payments, reduced errors, and richer transaction information. Geo-tagging, on the other hand, will help regulators monitor terminal distribution, prevent unauthorized use, and support financial inclusion strategies by identifying underserved areas.

The combined reforms are expected to enhance transparency, boost consumer confidence, and bring Nigeria’s payments system in line with international best practices.