In many rural towns, the “bank” people touch most often is not a branch at all, but a kiosk with a POS terminal, a handwritten ledger, and an agent who knows everyone’s name. A farmer cashes out to buy fertilizer, a teacher sends school fees, a trader tops up float to keep business moving. The same counter is also where people compare fees, complain about failed transfers, and ask which service is “safe”, because money conversations travel fast in places where cash flow is tight and trust is personal.
That everyday reality explains why the Central Bank of Nigeria’s newer rules around PoS and agent banking have attracted attention well beyond Nigeria. At their core, the rules are designed to repair and formalise trust in cash-in and cash-out networks that have grown rapidly but unevenly. They tighten how agents are appointed, monitored, and held accountable, and they clarify the lines between merchant payments and agency banking. While the regulations are Nigerian, the questions they raise are highly relevant for Kenya, where rural finance also relies heavily on agents rather than brick-and-mortar branches.
As soon as payments involve more than one currency, the discussion naturally drifts toward exchange rates and forex. Families receive remittances in dollars, pounds, or euros, small traders buy stock priced in foreign currency, and border communities often deal with two units of value at once. When exchange rates swing, the practical question at the kiosk becomes, “How much do I really get today?” not just “Did the transfer arrive?” Agents end up mediating conversions and explaining why the local-currency amount credited differs from last week for the same foreign-currency send, especially once fees, spreads, and timing delays are factored in. In that environment, forex trading talk slips into the same space as everyday multi-currency payments: customers ask whether they should hold value in a harder currency, convert now or later, or fund an online account they heard about as a way to “beat the rate”. The risk is that opaque pricing, unclear rails, and delayed reversals create exactly the confusion that fraudsters exploit. That is why rules that force clearer separation of transaction types and improve traceability matter: they help answer concrete disputes about which rate was applied, when it was applied, who applied it, and whether an agent handled a regulated payment service versus a higher-risk, loosely described “forex” transaction.
One of the most significant changes is the emphasis on clearer traceability. The Nigerian rules push institutions to ensure that agents operate through dedicated accounts or wallets linked to a single principal, rather than mixing personal, merchant, and agency funds. They also reinforce registration requirements for PoS devices and set explicit transaction limits for cash withdrawals and transfers handled by agents. The logic is straightforward: when every transaction sits on a clearly identified rail, it becomes easier to resolve disputes, detect fraud, and assign responsibility when something goes wrong.
From a trust perspective, this matters enormously. In rural areas, disputes are rarely abstract. A failed cash-out can mean a missed market day or unpaid school fees. When an agent can plausibly claim that a terminal is not registered to them or that a transaction ran through a different channel, confidence erodes quickly. Clearer rules reduce those grey areas. Customers may not know the regulatory language, but they feel the difference when reversals happen faster and explanations become more consistent.
Competition among providers, however, is likely to change. A notable feature of the Nigerian framework is the move toward agent exclusivity, where an agent is expected to work with only one principal institution. This departs from the multi-homing model common in many rural settings, where a single kiosk runs several apps and switches between them depending on network quality, commissions, or customer preference. Exclusivity strengthens accountability, because there is no ambiguity about who supervises the agent. But it also shifts bargaining power toward larger banks and fintechs that can afford better devices, higher floats, and stronger branding.
For small agents, especially in low-volume villages, this could be a mixed blessing. On one hand, a strong principal may offer more reliable systems and support. On the other, agents may lose the flexibility to negotiate commissions or fall back on alternative providers when systems go down. Over time, this can lead to consolidation, with smaller independent operators joining super-agent networks or exiting the market altogether.
Access is where the trade-offs become most visible. Rural finance survives on thin margins. When compliance requirements increase, providers naturally reassess where they deploy agents. Remote locations with low transaction volumes are often the first to feel the pressure. If the cost of monitoring, reporting, and liquidity management outweighs expected revenue, principals may quietly withdraw. For customers, that can mean longer travel distances to reach an agent, higher informal fees, or renewed reliance on cash held at home.
Kenya has long grappled with similar dynamics. Agent banking and mobile money transformed financial access across the country, especially outside urban centres. At the same time, Kenya has faced waves of fraud, agent liquidity shortages, and consumer complaints that have tested public confidence. Regulators have responded by strengthening consumer protection rules and payment system oversight, aiming to preserve access while keeping risks in check. The Nigerian experience adds another data point to this balancing act.
If Kenyan regulators or cross-border providers draw lessons from the CBN approach, several shifts are likely. There would probably be tighter controls around agent onboarding and device registration, potentially including stronger location verification. There would also be greater insistence on separating different types of transactions to make auditing and supervision easier. Finally, competition might tilt further toward larger, well-capitalised players that can absorb compliance costs without retreating from rural markets.
For rural households, the ideal outcome is not complicated. They want agents who have cash when needed, systems that work reliably, and clear answers when problems arise, including clarity on conversion rates and charges when payments touch more than one currency. If tighter rules deliver those basics, trust can deepen and usage can grow. But if regulation results mainly in higher fees, fewer agents, or more rigid networks that respond slowly to local needs, the social gains of financial inclusion could stall.
Ultimately, the question is not whether rules are needed, but how they are applied. Smart regulation focuses on behaviour and risk, not just paperwork. It targets bad actors without overwhelming honest agents who operate on slim margins. If Nigeria’s reforms succeed on that front, they will offer a valuable reference for Kenya and other countries where rural finance depends less on branches and more on human relationships across a counter.
