PoS operators barred from implementing price hike, face potential sanctions

• PoS Operators have been prohibited from implementing price increase on their range of transactions
• The FCCPC has stepped in to protect consumers against exploitation by PoS operators.
• The Commission clearly states that price fixing is totally not allowed as it disrupts the market.

The Federal Competition and Consumer Protection Commission (FCCPC) in Nigeria has issued a prohibition against PoS operators from implementing the newly declared surge in charges for Point of Sale (PoS) transactions.

The declaration follows the recent action by Association of Mobile Money and Bank Agents in Nigeria (AMMBAN) on behalf of specific PoS operators in the establishment of standardized prices for a variety of transaction services.

Consequently, the Central Bank of Nigeria (CBN) announced its intention to intervene in addressing the concerns surrounding the new charges implemented by PoS agents in Nigeria.

In a statement published on its website and signed by its Chief Executive Officer, Mr. Babatunde Irukera, the FCCPC clarified that the Federal Competition and Consumer Protection Act (FCCPA) does not permit any trade association to set prices in a manner that can disrupt the market.

The Commission cautioned the Association of Mobile Money and Bank Agents in Nigeria (AMMBAN) against implementing the proposed pricing, emphasizing that any such action would result in penalties as stipulated by the FCCPA.

FCCPC disallows price fixing

While acknowledging that the FCCPC Act (2018) acknowledges a certain level of self-regulation within professions or trades, the FCCPC emphasized that this recognition comes with significant limitations.

Specifically, the Act extensively restricts collaboration, particularly in terms of coordinating the provision and pricing of services.

It stated:

The FCCPA expressly prohibits any price-fixing or agreement among undertakings (whether bilaterally or multilaterally) or by undertakings acting in consensus on the platform, or under the aegis of an association to fix prices, coordinate supply or any other commercially sensitive factors that can limit or substantially prevent competition; or otherwise distort the market.

It added that the act of setting prices disrupts the market, hinders innovation and efficiency, and ultimately fails to benefit consumers or other businesses, except for those involved in such illicit collaborations or activities.

FCCPC to sanction erring PoS operators

The FCCPC warned that the FCCPA imposes severe penalties on cartels or any form of coordinated or collusive behavior among competitors, including actions taken at the association level.

It stated that the Commission is dedicated to enforcing the law to the fullest extent possible whenever there is substantial evidence indicating that a business is involved, either directly or indirectly, in such prohibited conduct or agreements.

It added:

To the extent that any combination of undertakings, including AMMBAN indeed, met, agreed or decided to impose uniform or coordinated fees/tariffs for services, this announcement should serve to ensure such undertakings cease and desist from that arrangement or similar discussions/conduct.

The Commission says it has commenced an investigation into the matter and appeals to consumers to share valuable and reliable information that can aid in the investigation and enforcement process regarding this matter.

CBN releases guidelines for PoS operations

In earlier news, Legit.ng reported that the Central Bank of Nigeria (CBN) issued a regulatory framework for agent banking operations to address and mitigate risks within the financial sector.

The guidelines were introduced through a circular titled “Exposure Draft of the Regulatory Framework for Agent Banking in Nigeria,” signed by Musa I. Jimoh, the director of the Payments System Management Department.

Within the 31-page document, Section 8.3 of the framework specifically outlines the activities that agents are prohibited from engaging in.

Source: Legit.ng