Across the world, Contactless Payments ("CPs") have gained significant traction and widespread adoption in recent years. These payments enable financial transactions which allow a customer to purchase products or services using a debit, credit, smartcard, or another payment device, by mere contact between the payment device customer and the point of sale ("POS") device. Although CP transactions have been in existence since the 1990s, they experienced a substantial increase in usage due to the global impact of the Covid-19 pandemic in 2020. Presently, CPs have become the preferred method of payment in numerous countries, with the projected global market value reaching USD 29.89 billion in 2022 and is projected to reach over USD 132.42 billion by 2032.

In our previous article, we examined the Exposure Draft of the Guidelines for Contactless Payments in Nigeria. On June 27, 2023, the Central Bank of Nigeria ("CBN") released the Guidelines on Contactless Payments in Nigeria ("Guidelines") to establish minimum standards and requirements for the operation of CPs within the country.

In this newsletter, we highlight some of the key provisions of the Guidelines.

1. Who Are the Stakeholders in A CP Transaction?

The Guidelines identify 11 (eleven) Stakeholders in CP transactions. They are: Acquirer; Issuer; Payment schemes; Card schemes; Switching Companies; Payment Terminal Service Provider; Payment Terminal Service Aggregator; Merchants; Terminal Owners; Customers; and any other stakeholder/participant as designated by the CBN.

It should be noted that only CBN-licensed institutions can serve as Acquirers and Issuers 1.

2. What Are the Standards for Participation in A CP Transaction?

All stakeholders involved in processing and/or storing customers' information are mandated to ensure that their terminals, applications, and processing systems comply, at the minimum, with the following standards: (i) Payment Application Data Security Standard (PA DSS); Payment Card Industry Pin Entry Device PCI PED; (iii) Payment Card Industry Data Security Standard (PCI DSS);(iv)Advanced Encryption Standards (AES); (v) EMV; (vi) ISO 27001; (vi) ISO 1444; (vii) All required Scheme certifications for contactless cards and terminals and other international standards as may be specified by the CBN from time to time.

It is important to note that the Guidelines provide that CPs cannot be activated by default. Customers must provide consent and be provided with the option to opt-in and out of a CPs Agreement.

In addition, operators are required to maintain valid certification for these standards, ensure ongoing compliance, and establish contactless payment agreements/contracts with relevant parties. It is important to note that operators must obtain CBN's approval for CP products, as well as for innovative use cases and value-added services.
Furthermore, all contactless devices issued by an operator must be configured to work within a maximum of 2cm from the payment terminal to manage the risk of data interception.
Relevant stakeholders should note that contactless payments images, symbols, tactile, graphics and/or the words "contactless payments" (in Braille) must be displayed on contactless payment instruments, contactless payment devices and locations where contactless payments are accepted.

3. What Is the Transaction Limit for Contactless Payment?

In a circular released with the Guidelines, the CBN set the transaction limit for each contactless payment through accounts/wallets in Nigeria at N15,000 ($19.3) and a daily cumulative of N50,000 ($64.3). Stakeholders are allowed to set limits in line with the CBN Guidelines.
For higher-value contactless payments that exceed these limits, customers will be required to provide appropriate verification and authorisation such as their PIN or biometric data. Existing Know Your Customer ("KYC") requirements and limits on the electronic payment channels would also apply. This is expected to mitigate the effect of fraud-related activities which may occur.

4. How Can Stakeholders Resolve Issues Where There Is a Dispute?

All stakeholders, parties or participants involved in contactless payment must establish robust support systems to guarantee round-the-clock assistance and collaborate harmoniously to ensure timely resolution of disputed transactions. Where a dispute remains unresolved, complaints may be escalated to the CBN.

5. Are There Any Sanctions or Penalties?

Failure to comply with the provisions of the guidelines and other relevant regulations of the CBN will attract sanctions and penalties as may be determined by the CBN.


The Guidelines reflect the growing importance and adoption of contactless payments method both globally and within Nigeria. Overall, it serves as a significant step forward in shaping the future of contactless payments in Nigeria, fostering financial inclusion, convenience, and trust for all stakeholders involved.


1. The acquiring bank/FI is the bank on the merchant end of the transaction, and the issuing bank/FI is the cardholder or customer's bank.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.