Nigeria is grappling with an escalating crisis in its digital-payment sector, marked by a surge in fraud, weak regulation, and the proliferation of unlicensed cryptocurrency activities. This stark warning comes from Olufemi Bamisile, Chairperson of the House of Representatives Ad-hoc Committee, which is currently investigating the economic, regulatory, and security implications of cryptocurrency adoption and Point-of-Sale (POS) operations in the country. During a resumed investigative hearing involving fintech leaders, POS operators, and representatives from regulatory and security agencies, Mr. Bamisile highlighted significant gaps within Nigeria's rapidly expanding digital-finance ecosystem.

The committee has received numerous reports detailing the widespread issue of unprofiled agents, cloned payment terminals, anonymous transactions, and poor Know-Your-Customer (KYC) compliance. These vulnerabilities collectively expose citizens to substantial financial loss, cybercrime, and security breaches. Mr. Bamisile specifically voiced concern over the increasing fraud linked to POS operations, emphasizing how unchecked agents, cloned terminals, and weak KYC practices perpetuate preventable dangers for Nigerians. Furthermore, the committee is alarmed by a growing trend of some POS operators allegedly offering unauthorized cryptocurrency and digital-asset services. Such activities raise critical red flags concerning anti-money laundering (AML), terrorism financing (TF), data integrity, and the misuse of platforms originally designed for basic payment services.

Another disturbing revelation for the committee involves the registration of fictitious companies at the Corporate Affairs Commission (CAC). These entities are reportedly using the National Identification Number (NIN) and Bank Verification Number (BVN) of unsuspecting citizens to open accounts and launder funds through unverified POS channels. This practice, Mr. Bamisile noted, underscores weak verification mechanisms and highlights an urgent need for a more coordinated oversight framework. The investigation also extends to the storage of sensitive customer data on foreign servers by some fintech companies. Mr. Bamisile warned that offshore data storage severely compromises national security efforts, impeding regulators and security agencies from conducting swift audits, tracing suspicious transactions, or enforcing compliance, particularly in a sector prone to terrorism financing risks and cyber-enabled crimes.

Despite the gravity of these issues, Mr. Bamisile assured operators that the committee's engagement is not confrontational. He acknowledged that the sector itself is struggling under a fragmented regulatory landscape, characterized by overlapping agency mandates, policy inconsistencies, and excessive compliance demands. The committee's clear mandate is to recommend legislation that will establish a harmonized regulatory framework, enhance security safeguards, improve consumer protection, and foster an environment where innovation and investment can flourish responsibly.

Adding to the urgency, Paul Okafor, National President of the Association of Digital Payment and POS Operators of Nigeria (ADPPON), informed lawmakers that the POS ecosystem has reached a