FCCPC To Sanction PoS Operators Over Collaborative Service Price Fixing

The Federal Government (FG), through its Federal Competition and Consumer Protection Commission (FCCPC), is planning to fine Point of Sales (PoS) operators who establish service tariffs by the Association of Mobile Money and Bank Agents in Nigeria (AMMBAN).

As a result, according to the FCCPC, AMMBAN's price fixing for its members is unconstitutional.

This is even after the commission clarified that it is not opposing individual PoS operators raising their charges as they see appropriate to benefit from the company.

The FCCPC's chief executive officer, Babatunde Irukera, stated in a statement that any attempt to form a PoS business cartel would be forbidden.

Irukera stated, “Just because the Commission was yet to persecute any POS Operators, does not mean that it is weak. The Commission prefers an advocacy approach to enforce obedience to the law because the PoS business is dominated by young Nigerians who are creating jobs for themselves.”

However, the chief executive officer stressed that the commission is going to punish any PoS operator who violates the law while alerting PoS operators that violating a Commission order carries further penalties in addition to the underlying illegal conduct that is the subject of the order, such as up to N10,000,000 for corporate entities and N1,000,000 and or a prison sentence of up to three months for individuals.

“Considering that membership of AMMBAN probably consists mainly of small businesses and creates employment for young and mostly vulnerable citizens, the Commission adopted advocacy and business education as the tool to promote and enforce obedience to the law.

“This is a prudential, not weak or helpless approach to ensuring compliance, and it underscores the Commission’s proportionality approach to its consequence management system; and interpretation of the law,” he further explained.

The CEO stated that the commission has not tried to restrict PoS providers' ability to choose and set prices for services in any way they see fit, subject to Section 127 of the Federal Competition and Consumer Protection Act 2018 (FCCPA), which prohibits manifestly unfair or exploitative prices.

“As a matter of fact, and to the contrary, the commission respects and encourages a pricing methodology that is the product of market forces in a free, competitive, and undistorted market. There is no evidence that the PoS market lacks sufficient players or competition in Lagos which is the subject of the announcement, or anywhere else for that matter.

“The Commission welcomes the inherent powers and discretion of each PoS operator to set their prices based on their internal mechanisms and relevant markets, providing consumers with choices and the best possible prices while ensuring profitability,” he clarified.

However, this is not the first time PoS agents are planning to raise their charges. As Nigerians suffered cash scarcity in Q1 2023, PoS agents raised the price since the demand for Naira was higher than the supply, forcing them to turn to unusual methods of obtaining cash, such as purchasing cash at petrol stations.