CBN Issues New Guidelines On Contactless Payments, Sets Limits On Transactions

Guaranty Trust Bank (GTBank), United Bank for Africa (UBA), Zenith Bank and other financial institutions have been directed by the Central Bank of Nigeria (CBN) to limit transactions on contactless payments.

In a circular conveying guidelines to banks, other financial institutions and payment service providers on Tuesday, the CBN ordered that the transaction for contactless payment should be limited to N15,000 per spend.

The financial regulator also limited daily cumulative transactions to N50,000, stating that the review of the contactless payment limit was done to protect the financial system of Nigeria.

According to the CBN, “Contactless technology enables an alternative payments method whereby payment instruments are used without physical contact with devices.

“Contactless technology in payments provides easy, convenient, and efficient cashless options for users. Examples of contactless payment instruments include pre-paid, debit and credit cards, stickers, fobs, wearables devices, tokens and mobile electronic devices. 

“Contactless-enabled payment terminals interact with contactless payment devices to facilitate payments,” the apex bank wrote in the circular to banks and other financial institutions. 

Prime Business Africa gathered from the circular that users trying to transact with contactless payments above the limit will be made to provide their pin and biodata to complete the transaction. 

Also, GTBank, UBA, Zenith Bank and other financial institutions are mandated to adopt the Know Your Customer (KYC) requirements when dealing with contactless payments users looking to make transactions above the set limit.

In another statement relating to the same guidelines on contactless payments, the CBN said: “Following the issuance of the Guidelines on Contactless Payments in Nigeria and in cognisance of the risks associated with contactless payments, the Bank hereby defines transaction limits above which verification and authorisation are required.”

Expatiating further, the CBN noted: “Higher-value contactless payments are transactions that exceed the above stated limits and shall require appropriate verification and authorisation.

“For these transactions, existing KYC requirements and limits on the electronic payment channels shall apply. Limits above this stipulated daily cumulative limit shall be conducted using contact-based technology.”