CBN Introduces N15,000 Per Transaction Limit, N50,000 Daily Limit on Contactless Payments in Nigeria | What is Contactless Payment

Contactless Payment in Nigeria

The Central Bank of Nigeria (CBN) has implemented new transaction limits for contactless payments in the country, effective from June 27, 2023. These guidelines, outlined in the CBN's document titled "Guidelines on Contactless Payments in Nigeria," specify that contactless payments made through Nigerian accounts or wallets will be restricted to N15,000 per transaction and a daily cumulative limit of N50,000.

Under the updated regulations, customers can conveniently make contactless payments of up to N15,000 per transaction and up to N50,000 per day without the requirement of entering their personal identification number (PIN) or undergoing biometric verification.

The circular, signed by Musa Jimoh, Director of the Payment Systems Management Department of the CBN, explains that these guidelines were developed to standardize operations in the payment system, promote the adoption of innovative products, and ensure the stability of the financial system.

What is Contactless Payment?

Contactless payment is a method of paying for goods and services which does not require  cash or even swiping a card. All you have to do is tap or hold your contactless card or smartphone near a compatible card reader while you are making payment.

Contactless payments, which enable transactions without physical contact between the payer and the acquiring device, have gained recognition as an innovative payment option suitable for low-value and high-volume transactions. In Nigeria, numerous companies and services, including banks, mobile payment providers, e-commerce platforms, transportation services, and contactless payment apps, offer contactless payment options, contributing to the growing adoption of this payment method.

Reasons Why CBN Introduced Per Transaction and Daily Transaction Limit on Contactless Payments in Nigeria 

The CBN's decision to establish transaction limits for contactless payments aims to ensure that participants in contactless payment adhere to appropriate risk management processes and comply with relevant standards. It also seeks to enhance the security and convenience of contactless payments, which utilize technologies like Near Field Communication (NFC) and Quick Response (QR) codes, allowing customers to pay without physical contact with the merchant or the payment terminal.

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However, for contactless payments exceeding the prescribed limits, customers will need 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.

In cases where contactless payments surpass the daily cumulative limit of N50,000, customers will be required to utilize contact-based technology, such as inserting or swiping their cards on the payment terminal.

The CBN underscores that these new transaction limits align with its mandate to promote a secure and efficient payment system in Nigeria while safeguarding the interests of consumers and other stakeholders in the industry.

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