Lotus Bank is the third non-interest bank in Nigeria, after Jaiz Bank and TAJ Bank, and the first headquartered in Lagos. It was also one of the first five banks to meet the Central Bank of Nigeria’s new capital thresholds, joining Access Bank, Zenith Bank, Ecobank Nigeria, and later Jaiz Bank. According to the bank, its capital base had already surpassed the ₦20 billion ($13.3 million) required for a national non-interest bank before the CBN’s announcement. The bank operates on profit- and risk-sharing models such as Mudarabah and Musharakah. These models replace interest-based structures, aligning Lotus with Islamic financial principles.
Now, with just 46 days left before the October 31, 2025, deadline, the CBN is enforcing new regulations requiring all POS machines in Nigeria to be geo-tagged within 60 days. The mandate, paired with the adoption of ISO 20022, is targeted at strengthening fraud controls. Lotus Bank has moved ahead of the curve by updating its systems, testing transactions with the national central switch, and creating flexible options for its agents. Merchants with clean records can apply to operate temporarily outside their registered locations, showing how Lotus blends compliance with customer-centred solutions.
“At Lotus, we prioritise transparency. In a non-interest bank, ethical use of data is as important as regulatory compliance. Trust is built when people know their information is being used responsibly,” Akinlabi Adegoke, Chief Digital Officer, said. For the new geo-tagging regulation, Lotus is considering a hybrid approach that allows either swapping terminals or fully replacing them with Android-based devices already built to meet the requirements.
From its foundation, Lotus Bank has sought to serve the unbanked and underbanked, promoting financial inclusion and ethical investing. In this interview, Adegoke discusses geo-tagging, explaining how it works and its impact on regular POS agents.
POS transactions in Nigeria are expanding at an extraordinary rate. According to the Nigerian Inter-Bank Settlement System (NIBSS), POS transactions hit $10.45 trillion in the first quarter of 2025, a 209% increase from ₦3.62 trillion in Q1 2024. With such rapid growth, concerns abound about whether stricter rules could disrupt agent networks.
Click to signupThis interview has been edited for length and clarity.
Could geo-tagging unintentionally push POS agents underground?
There is always that risk if the policy is applied without flexibility. Education and clear incentives are key. When agents see geo-tagging as a tool for protection, not punishment, they are more likely to adopt it. It should be framed as a safeguard for their business rather than a barrier.
Does this rule give banks more control over agents than fintechs?
It is levelling the field rather than shifting it. Both banks and fintechs must comply, but banks have an opportunity to pair compliance with stronger consumer trust and protection. That is where our advantage lies.
Where will Lotus store sensitive location data, and how is it secured?
We treat geo-data with the same level of care as all customer information. At Lotus, data is stored in line with CBN and NDPR standards, using encryption and restricted access. Security is built into the system from the ground up, not as an afterthought.
Beyond compliance, can geo-tagging be a business insight tool for merchants?
Yes, absolutely. Location data can highlight patterns in customer traffic and transaction hotspots. Used ethically, it becomes more than a regulatory tool; it helps merchants understand their market better and grow sustainably.
Do you see AI and geo-data changing how you score merchants?
AI has the potential to combine location insights with transaction history to give a fairer, more holistic view of merchants. The important thing is to apply it responsibly. Scoring must remain transparent and free from bias or discrimination.
What’s the Sharia or ethical lens on geo-tagging rules?
From an ethical finance perspective, data must never be exploited. Geo-tagging is acceptable when it protects customers, promotes transparency, and prevents harm. It should always serve fairness and accountability, not surveillance for its own sake.
Lotus champions ethical finance. How do you apply ethical finance to digital surveillance risks?
We set clear boundaries. We collect only what is necessary, secure it properly, and communicate openly with customers. For us, ethics means using data to serve people, not to monitor them.
How do you plan to change the customer perception that geo-tagging is “policing”?
The perception can only change through communication and design. Customers must see that geo-tagging protects them from fraud and holds agents accountable. When explained clearly, it becomes about safeguarding, not surveillance.
What does “human-centred geo-tagging” look like for a single POS operator?
It should be simple, low-cost, and supportive. For a single POS operator, the process must fit into their daily reality without being a burden. The goal is to make compliance easy, not overwhelming.
What’s the biggest misunderstanding customers have about CBN’s new rules?
Many people assume the rules restrict them as customers. In reality, they apply to agents, not end-users. The intention is to make transactions safer and more accountable for everyone.
Will Lotus focus on fewer, stronger POS agents under this regime?
Yes, quality will take priority over quantity. Stronger, compliant agents who can scale responsibly will deliver better value to customers in the long run.
Some fintechs thrive by bending rules, but banks cannot. How do you compete fairly?
We compete by focusing on trust and sustainability. Cutting corners may produce quick wins, but in financial services, trust is the currency that lasts. That’s where banks like Lotus hold the advantage.
ISO-20022 is coming alongside geo-tagging. How do both together reshape banking?
Together, they push the industry toward more structured, transparent, and secure transactions. ISO-20022 improves the quality of financial data, while geo-tagging anchors that data in real-world accountability. It’s a step toward greater integrity in the system.
If you could redesign geo-tagging from scratch, what would you change?
I would focus on simplicity. More automation, lower costs, and less friction for agents. When the system is lighter to adopt, compliance comes naturally.
Five years from now, do you see POS as still critical or replaced by something else?
Access points will always be critical, even if the technology evolves. Whether it’s POS, mobile, or biometrics, customers will continue to need physical touchpoints that give them trust and convenience. POS may change form, but the need it serves will remain.
