CBN set limits on contactless transactions

The Central Bank of Nigeria has issued a guideline placing a limit on contactless payment.

This was disclosed by the CBN on Tuesday in two circulars signed by the CBN’s Director, Payments System Management Department, Musa Jimoh.

The first circular contains guidelines for banks, other financial institutions, and payments service providers on contactless payments.

It read in part, “The Central Bank of Nigeria, in furtherance of its efforts to standardize operations in the payments system, while encouraging the deployment of innovative products and sustaining the financial system stability, developed the Guidelines for Contactless Payments in Nigeria.

“Contactless payment, which involves the consummation of financial transactions without physical contact between the payer and the acquiring devices, has been identified as an innovative payment option for safe and efficient conduct of low- value and large-volume payments.

“The Guidelines was conceived to ensure that participants in contactless payments implement appropriate risk management processes and measures while keeping to best relevant standards.”

The bank noted that all banks, other financial institutions, and payments service providers are required to ensure strict compliance with the Guidelines.

In the second circular, the bank noted that there is an N15,000 transaction limit on contactless payments through accounts/wallets in Nigeria.

It added that there is a daily cumulative limit of N50,000.

The circular read, “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.”

The apex bank noted that transactions above the daily limit will require appropriate verification and authorization.

It read, “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.”