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What To Know About Contactless Payments

On the 17th of October 2022, the Central Bank of Nigeria (“CBN”) issued the Exposure Draft of the Guidelines for Contactless Payments in Nigeria (the “Guidelines”). The draft Guidelines was issued to ensure that participants in contactless payments implement appropriate risk management processes and measures while keeping to best relevant standards.

Contactless payment involves the use of payment instruments without any physical contact between the users and the acquiring devices, like cash or swiping a card. Examples of contactless payment are pre-paid, debit and credit cards, stickers, wearable devices, tokens, and mobile electronic devices.

Who are the participants in contactless payments?

  1. Acquirers
  2. Issuers
  3. Payment Schemes
  4. Card Schemes
  5. Switching Companies
  6. Payments Terminal Service Providers (PTSPs)
  7. Payments Terminal Service Aggregators (PTSA)
  8. Merchants
  9. Terminal Owners
  10. Customers and
  11. Any other stakeholder/participant (s), as designated by the CBN.

Roles and Responsibilities of participants under this Guidelines

Participants are saddled with several responsibilities under the Guidelines, they include:

  1. To ensure that applications, instruments, tokens, and devices meet current standards and specification for contactless payments.
  2. Acquirers be responsible for trainings for merchants and reasonable process are put in place for the confirmation of customer identity and detecting suspicious and unauthorized usage.
  3. To ensure that the limits set for contactless transactions are strictly adhered to all time.
  4. Issuers in conjunction with banks, switching companies and other stakeholders, ensure resolution of disputed contactless transactions within the timelines specified by the CBN. Disputes may be escalated to the CBN if it remains unresolved.
  5. Payment schemes shall ensure that all contactless transactions are processed online or/and submitted via current processing specifications.
  6. PTSAs to ensure that on an annual basis certify POS terminals for contactless payments to ensure that the POS terminals meet standards approved for the industry.
  7. Customers to have the option to opt-in to contactless payments by applying and consenting to terms and conditions of contactless payments products and services.
  8. Participants to set their transaction limits in line with the limits set by CBN.
  9. Participants shall render monthly returns on contactless payment transactions including volume, fraud data, failed transactions etc. to the CBN in a format prescribed by same from time to time.

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