Nigeria Embraces Contactless Payment Innovation with New CBN Framework

The Central Bank of Nigeria has rolled out a comprehensive set of regulatory guidelines aimed at advancing contactless payment adoption across the nation’s financial ecosystem. This strategic move reflects the global momentum toward proximity-based payment solutions, where consumers can complete transactions by simply tapping or waving their payment-enabled devices at merchant terminals, eliminating the need for traditional PIN entry and reducing friction in the payment experience.

How Contactless Payment Technology Works

Contactless payment relies on two complementary technologies: radio frequency identification (RFID) and near-field communication (NFC). These wireless protocols enable secure, instantaneous authorization of transactions without requiring explicit consumer confirmation at the point of sale. When a compatible device—whether a smartphone, payment card, or wearable—comes into proximity with a POS terminal, encrypted data is exchanged to complete the transaction. This approach prioritizes both speed and security, empowering users to conduct financial transactions seamlessly while maintaining fraud-prevention measures.

The technology itself is industry-standard, developed through global collaboration. EMVCo, the standards organization founded by payment giants Europay, Mastercard, and Visa, has been instrumental in establishing technical specifications for smart payment cards and compatible terminal infrastructure used worldwide.

Transaction Limits and Daily Caps Under New Regulations

The CBN’s guidelines establish clear boundaries on contactless payment usage to balance convenience with consumer protection. Transactions are capped at ₦15,000 (approximately $19.65 USD) per single transaction, with a cumulative daily limit of ₦50,000 (approximately $65.50 USD). These thresholds apply to all contactless transactions made through bank accounts or digital wallets registered within Nigeria.

To access contactless payment functionality, users must possess a Bank Verification Number (BVN), Nigeria’s unique banking identifier. For transactions exceeding the established limits, additional authentication methods—including PIN codes, mobile verification codes, or biometric identification—remain mandatory. This tiered approach ensures that higher-value transactions maintain rigorous security protocols.

Fraud Liability Framework and Security Requirements

Responsibility for fraudulent transactions is explicitly distributed among three stakeholders in the payment chain. Acquirers (the merchant’s financial institution), issuers (the customer’s bank), and merchants themselves are held jointly and severally liable for unauthorized transactions resulting from their negligence, collusion, or inadequate security measures. This allocation of liability incentivizes all parties to implement robust fraud-prevention controls and maintain operational vigilance.

The regulatory framework reflects lessons from global adoption patterns. Post-pandemic data from Mastercard indicates that contactless transactions now represent approximately 75% of all card payments in Europe, while Visa reports that contactless methods account for roughly 80% of in-person payment transactions in the United Kingdom. These trends underscore how contactless payment has transitioned from a convenience feature to a mainstream payment method, and Nigeria’s regulatory initiative positions the country to harness similar benefits while maintaining stringent oversight.

By establishing clear guidelines for contactless payment implementation, Nigeria’s central bank demonstrates a commitment to modernizing the payment infrastructure while protecting consumers and maintaining financial system integrity.