The House of Representatives on Wednesday underscored the urgent need to implement verifiable documentation of Point of Sale (POS) users’ and fund recipients’ identities across the country.
The resolution was passed as a sequel to the adoption of a motion sponsored by the Chairman, House Committee on Food Security, Hon. John Okafor.
In his lead debate, Hon. Okafor expressed concern over “increasing challenges posed by the undocumented identities of point of sale users and fund recipients in Nigeria, leading to opportunities for fraudulent activities within the financial system, and the necessity to combat such illicit practices and safeguard the integrity of financial transactions within Nigeria.
“The House is aware that undocumented POS transactions from both party’s identities create a loophole for fraudulent activities, such as identity theft, money laundering, and unauthorised transactions.
“Also, by enforcing the documentation of users’ identities, the incidence of fraud will significantly reduce, and the security of financial transactions in Nigeria will be enhanced.
“The House is also aware that proper documentation of POS users’ identities fosters accountability among operators and users.
“This transparency will help trace transactions back to the individuals involved, holding them accountable for illegal activities conducted through the POS system, and ensure a lasting end to the criminal use of POS.
“The House is worried that there is an obvious regulatory bias and enforcement challenge towards due process by the relevant regulatory bodies and the urgency for immediate intervention to avert this ugly situation and shield Nigerians from the hands of criminalities through the use of the POS system.
“The House is also aware that establishing a system for verifiable documentation of POS users’ and recipients’ identities aligns with the national and international financial regulatory requirements with the objective of preventing financial crimes and ensuring compliance with anti-money laundering (AML) and know your customer (KYC) regulations.
“The House is cognisant that implementing stringent identity verification measures will protect consumers and businesses from becoming vulnerable to fraudulent schemes carried out through POS transactions.
“Additionally, the process will build trust in the financial system and encourage greater participation in the growing cashless transactions system in Nigeria,” he noted.
To this end, the House mandated the joint Committees on Digital & Electronic Banking, Finance, Banking Regulations, and Financial Crimes to invite the Governor of the Central Bank of Nigeria (CBN) and the Group Managing Directors (GMDs) of all commercial banks as well as other financial institutions utilising POS services to appear before the Committees and find immediate and lasting measures to address the challenges and report back within four legislative weeks.
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