The Central Bank of Nigeria (CBN) last week issued a new directive mandating all participants in the nation’s payments ecosystem to migrate fully to the ISO 20022 messaging standard and geo-tag all payment terminals before the October 31, 2025 compliance deadline.
According to the circular signed by the CBN Director, Payments System Supervision Department, Dr. Rakiya Yusuf, the apex bank said the move aligns with global standards, particularly the Society for Worldwide Interbank Financial Telecommunications (SWIFT) timelines, and is aimed at strengthening the integrity, transparency, and efficiency of Nigeria’s rapidly expanding electronic payments industry.
The circular which was addressed 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), Super Agents and other licensed operators, sets strict rules for compliance with both ISO 20022 messaging and the mandatory geo-tagging of all payment devices.
ISO 20022 is a global financial messaging standard designed to improve the quality of transaction data. In simple terms, it ensures that banks and payment operators across the world speak the same “data language” when sending and receiving payment instructions.
Unlike older systems that carry limited information, ISO 20022 allows richer, structured data such as the payer’s name, the payee’s details, merchant identifiers, and transaction metadata to be included in messages. This improves accuracy, transparency, and compatibility between different payment systems.
By adopting ISO 20022, Nigeria’s payment messages, whether for local transactions or international settlements, will align with global practices in Europe, America, and Asia. The circular whilst noting that ISO 20022 is the standard for payment messaging to support Nigeria’s payments objective of ensuring standardised quality data, directed that “payment transaction messages exchanged domestically or internationally must be formatted in ISO 20022 in line with CBN and SWIFT specifications.
Therefore, all institutions are expected to ensure complete and accurate population of mandatory data elements, including payer/payee identifiers, merchant/agent identifiers, and transaction metadata.
“Insisting that all in-scope institutions must complete migration activities and be fully compliant not later than October 31, 2025, the apex bank said this will help combat fraud, strengthen compliance checks, and improve financial monitoring.
The same deadline was also set for the players in the payment industry to ensure that all existing and new point of sale terminals are equipped with geo-tag and meet the minimum operating system of Android Operating System (OS) v10.
“Geo-tagging refers to the process of attaching geographical location information (latitude and longitude coordinates) to payment devices such as Point-of-Sale (PoS) terminals. With this technology, regulators and operators can know exactly where a PoS terminal is located at the time of use, ensuring that it matches the registered business address.
“By doing so, it becomes easier to prevent fraudsters from moving devices to unauthorised locations for illegal transactions.”
In its circular, the CBN explained that every payment terminal must now come with built-in GPS capability to capture location data. This data will be included in every transaction message, providing real-time visibility into where payments are being initiated.
A 10-metre geofence has been prescribed, meaning transactions can only take place within 10 metres of the registered business or service location. Any attempt to use a PoS machine outside this radius will automatically fall foul of the new rule.
Industry observers say the combined effect of ISO 20022 and geo-tagging will make Nigeria’s payment system safer, more transparent, and easier to integrate with the rest of the world. ISO 20022 ensures cleaner, standardised data, while geo-tagging adds a security layer that ties every transaction to a physical location. Together, they will help regulators and operators quickly flag suspicious activities, reduce fraud, and improve oversight.
The CBN has fixed October 31, 2025, as the final deadline for ISO 20022 compliance, while all existing PoS devices must be geo-tagged within 60 days of the circular. Compliance checks will begin on October 20, 2025.
The apex bank stated that all payment terminals, whether new or already deployed—must have double-frequency GPS receivers to guarantee reliable location capture. Operators are required to register each terminal with a Payment Terminal Service Aggregator (PTSA) and provide accurate latitude and longitude coordinates of the merchant or agent’s place of business.
Geo-location data, the CBN ordered, must be captured at the point of transaction initiation and included in the payment message payload as a mandatory field. “All existing terminals must be geo-tagged within 60 days of this circular; new terminals going forward must be geo-tagged before certification and activation,” the apex bank said.
The circular also raised technology and certification requirements for payment service providers. All PoS terminals and applications must now be certified by the National Central Switch. As part of this certification, the National Central Switch Software Development Kit (SDK) for geolocation monitoring and geofencing must be embedded within PoS applications. To ensure compatibility, Android Operating System version 10 has been set as the minimum requirement across all terminals.
The CBN further directed that all terminals must adhere strictly to approved Merchant Service Codes (MSCs) per sector, while devices not routed through a PTSA would not be allowed to transact.
The apex bank has warned that validation exercises will commence on October 20, 2025, meaning non-compliant operators could face sanctions, including suspension of devices from the payments system.
The new directive comes at a time when fraud in the PoS and mobile money space has become a growing concern. Fraudsters have been known to move PoS devices away from their registered addresses, making it difficult for regulators to track transactions.
By tying every terminal to a specific location and enforcing a 10-metre geofence, the CBN aims to cut down on such abuses. At the same time, ISO 20022 will make it easier to track, reconcile, and audit financial flows across institutions.
The CBN’s latest circular represents one of the most far-reaching reforms of Nigeria’s payment infrastructure in recent years. By insisting on ISO 20022 and geo-tagging, the apex bank is laying the foundation for a more transparent, secure, and globally compatible payments ecosystem.
For banks, fintechs, and merchants, the task ahead involves significant upgrades to systems and devices. But for the wider economy, the benefits are clear: reduced fraud, cleaner data, and stronger confidence in digital transactions.
