Contactless payment is one of the topics that was discussed in the just concluded digital expo 2023. During the program, the Central Bank of Nigeria (CBN) promised to introduce guidelines for contactless payments.
To bring its promise to light, the CBN introduced new transaction limits for digital payment in the country effective June 27, 2023. These limits are outlined in the CBN’s document titled “Guidelines on Contactless Payments in Nigeria.”
According to these guidelines, digital payments made through accounts or wallets in Nigeria will be restricted to N15,000 per transaction and a daily cumulative limit of N50,000.
What the CBN Contactless Payment Entails
Under these new regulations, customers can conveniently make contactless payments of up to N15,000 per transaction and up to N50,000 per day without the need to enter their personal identification number (PIN) or undergo biometric verification.
The circular was signed by Musa Jimoh, Director of the Payment Systems Management Department of the CBN. It explains that the guidelines were developed by the apex bank to standardize operations in the payment system, promote the adoption of innovative products, and ensure the stability of the financial system.
Contactless payments, which enable transactions without physical contact between the payer and the acquiring device, are recognized as an innovative payment option suitable for low-value and high-volume transactions.
In Nigeria, various companies and services, including banks, mobile payment providers, e-commerce platforms, transportation services, and digital payment apps, offer digital payment options, contributing to the growing adoption of this payment method in the country.
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Why Place Limits on Contactless Payment
The implementation of limits on digital payment by the CBN aims to ensure that participants in digital payment implement appropriate risk management processes and adhere to relevant standards.
It also seeks to enhance the security and convenience of digital payments, which rely on technologies like Near Field Communication (NFC) and Quick Response (QR) codes to enable customers to pay without physical contact with the merchant or payment terminal.
Conclusion
However, for digital payments that exceed the prescribed limits, customers will be required to provide additional verification and authorization, such as their PIN or biometric data.
The CBN emphasizes that for such transactions, the existing Know Your Customer (KYC) requirements and limits on electronic payment channels will continue to apply.
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