In an interesting partnership, Nigerian blockchain payments company Zone and the Nigerian Inter-Bank Settlement Scheme (NIBSS) are introducing blockchain technology to Point-of-Sale (POS) payments. This collaboration aims to improve transaction reconciliation, dispute resolution, and reduce fraud in Nigeria’s POS systems.
Zone’s blockchain will allow financial institutions to access a ledger of all recorded transactions, helping banks and fintech firms settle disputes quickly and minimize customer waiting times. The platform also promises to reduce POS-related fraud and chargebacks by integrating transaction data across the system. “We’ve built the PTSA functionality into the blockchain network so that every node [on the blockchain] can perform these checks,” said Zone CEO Obi Emetarom.
POS transactions traditionally involve two intermediaries: Payment Switches and Payment Terminal Service Aggregators (PTSAs). The communication between these intermediaries can become fragmented during system downtimes, making reconciliations challenging. Zone’s solution simplifies the process by integrating PTSA functions directly into the blockchain ledger, as explained by Emetarom: “The PTSA [NIBSS] will use that function to screen payment terminal transactions which they perform today on a central system.”
This new blockchain system initially launched with automated teller machines (ATMs) and has now expanded to include POS payments, thanks to the partnership with NIBSS. Emetarom acknowledges that for the blockchain-based PTSA system to be fully effective, it must achieve widespread adoption across Nigeria’s banking sector. Currently, over 30 financial institutions are integrated with Zone’s network.
Despite the anticipated benefits, challenges remain, such as the need to scale infrastructure to handle Nigeria’s growing digital transaction volume. One blockchain developer noted concerns about transaction throughput, stating that “some [blockchain] layers take about 5 minutes to reach finality, causing a lag in moving money around.”
However, Zone remains optimistic, claiming a transaction success rate of over 99%. Emetarom forecasts a significant reduction in POS-related fraud within the next five years, stating that “in 5 years, POS-related fraud activities—particularly the ones related to chargeback—will be zero or very close to zero.”
This partnership represents a significant step forward for Nigeria’s payments ecosystem.
