ATM Fees: Nigerians kick, pledge loyalty to digital banking, PoS

Joy Agwunobi 

Nigerians are increasingly turning to online transactions as banks across the country begin implementing the Central Bank of Nigeria’s (CBN) directive on ATM withdrawal charges.

The policy, which took effect on March 1, 2025, introduces a ₦100 fee on ATM withdrawals of up to ₦20,000 or less, a move that has sparked widespread dissatisfaction among bank customers.

Many Nigerians who rarely visit ATMs or have completely stopped using their ATM cards say the new charges will have little impact on their banking habits. However, others are expressing concerns over the additional financial burden it places on their transactions, especially in an already challenging economic climate.

Under the revised fee structure, commercial banks have discontinued the previous allowance of three free withdrawals per month on other banks’ ATMs. Now, every withdrawal made from a different bank’s ATM attracts a ₦100 charge.

The CBN has justified this policy by citing rising operational costs in maintaining Automated Teller Machines (ATMs) across the banking industry. However, this explanation has done little to quell public frustration, especially amid rising costs across sectors such as telecommunications, electricity, and digital banking.

On February 10, 2025, the CBN issued a circular to all banks and financial institutions, formally announcing the new fee structure. According to the circular, withdrawals from a customer’s own bank ATM will remain free of charge. However, withdrawing ₦20,000 or less from another bank’s ATM now attracts a ₦100 fee per transaction.

Many customers find the withdrawal fee increase burdensome, particularly in an economy where financial struggles are widespread. However, some Nigerians, already accustomed to digital banking and PoS transactions, appear unbothered by the revision despite the ₦50 Electronic Money Transfer Levy (EMTL) on digital transactions.

Chibundu Onuigbo, an entrepreneur based in Imo State, shared her perspective on the new implementation, stating, “It didn’t really bother me much because I haven’t used my ATM card for over a year. I conduct my transactions and make payments using my bank app or USSD.”

She further explained, “I only use my ATM card for online payments, such as purchasing items that require me to input my card details. I also use it occasionally for my Netflix subscription. I rarely carry my card around; in situations where I need cash, I simply transfer money to a POS operator in exchange for cash. I understand that online transactions come with their own fees, but they are more convenient.”

Similarly, Chidera Asugha, a supply chain manager in Lagos, stated, “I use Access Bank, and I mostly rely on POS transactions. I don’t think I have even used an ATM this year.”

He noted that the charges for POS withdrawals remain unchanged, adding, “If I withdraw ₦5,000, the charge is still ₦100, while for ₦10,000, it remains ₦200.”

David Oke, a secondary school teacher, expressed his experience, saying, “I initially thought the charge only applied to withdrawals of ₦20,000 and above, until I used my GTB card at a First Bank ATM to withdraw ₦5,000 and was debited ₦107.50 as a charge.”

He pointed out that the system seems to encourage customers to use their bank’s ATM terminals, overlooking the fact that many people live far from their bank branches. “In most cases, people prefer to use POS or USSD transactions because, when you compare the costs, they are even cheaper,” he added.

The CBN has encouraged Nigerians to report banks whose ATMs are not dispensing cash to its Consumer Protection Department. However, Business A.M. observations from ATM galleries in Lagos recently revealed that while most machines had cash loaded, some customers expressed frustration over the new charges.

Adebayo Segun, a customer at EcoBank along Airport Junction, said, “This implementation will only affect the poor masses who are struggling to make a living. I am using this ATM because it’s my bank, so I won’t be charged. Earlier this week, I used my card at a UBA  ATM, and the charge was outrageous.”

“It’s frustrating that we now have to pay to access our own money. First, it was card maintenance charges, and now this. It feels like we are being penalised for using the banking system. For small business owners like me, this is too much. How much am I even making that I should be spending so much on fees?” Segun lamented.

Another customer, Folashade Asemota, at Zenith Bank, Okota Road branch, noted that using a Point of Sale (PoS) agent had become cheaper than ATMs. “This government does not care about us. They wake up one morning and introduce policies that make life more difficult.”

Despite the rationale behind the policy, concerns remain about whether Nigeria’s banking infrastructure is equipped to support a fully digital payment system as customers frequently experience network failures, delayed transactions, and technical issues with banking apps, making online transactions unreliable.

Bimpe Ayinde, a customer at Fidelity Bank, Airport Road, stated, “I came to activate my bank app and decided to use the ATM. I was surprised to see cash available because, in the past, this bank in particular rarely had money in their ATMs. I think banks are trying to encourage more ATM use to generate revenue, but the charges are too much.”

Ayinde further suggested that if banks must impose a ₦100 charge per withdrawal, they should increase the number of free withdrawals before applying the charge. “That way, we will know that they care about us too. The economy is tough, and the cost of living is no longer funny – everything is just too expensive,” she added.

Legal and consumer advocacy concerns

As public outrage over the new withdrawal charges grows, consumer advocacy groups have urged the CBN and commercial banks to review the policy. The Socio-Economic Rights and Accountability Project (SERAP) has taken legal action against the CBN, seeking to reverse what it describes as an “unfair and unjust” increase in ATM transaction fees.

In an open letter signed by Kolawole Oluwadare, the deputy director of SERAP urged President Bola Tinubu to direct CBN Governor Olayemi Cardoso to suspend the implementation of the increased ATM fees pending the outcome of the lawsuit.

The letter stated, “The CBN has the responsibility to uphold the due process of law, protect the integrity of the judicial process, and ensure that its practices and operations do not undermine the rule of law or the Court. Implementing the increased ATM fees while the lawsuit is pending would make a mockery of the judicial process and the rule of law.”

CBN Speaks

Defending the policy, John Onojah, acting director of the financial policy regulation department at the CBN, explained that the initiative was designed to improve access to cash while maintaining the push for a cashless economy.

He acknowledged that, in recent times, accessing cash has been challenging for many Nigerians due to various factors. To address these concerns, the CBN undertook a thorough assessment of the situation, including the challenges associated with ATM operations.

Onojah pointed out that some Automated Teller Machines (ATMs) have been removed from public spaces, while others have been out of service or unable to dispense cash, causing frustration among bank customers. In response, the CBN engaged with key stakeholders, including banks and financial institutions, to understand the root causes of these issues and devise solutions.

“The outcome of these engagements led to the recently issued circular, which is aimed at addressing cash shortages and making ATMs more reliable,” he explained. “Now, while Nigerians may need to pay a small fee in some cases, they will have wider access to cash through multiple channels and locations.”

He further assured Nigerians that, with these measures in place, they would no longer experience situations where they travel to an ATM only to find that it is unable to dispense cash. “We are assuring Nigerians that when they visit an ATM, they can be confident that cash will be available,” he reiterated.

Onojah also clarified misconceptions about ATM withdrawal fees, particularly regarding transactions made on machines operated by banks other than the customer’s own.

“In the past, customers could make three free withdrawals on ATMs that did not belong to their bank. However, what many do not know is that their banks were absorbing the costs of these transactions,” he said. “Now, customers have a choice: if they withdraw from their own bank’s ATM whether onsite or offsite—they will not pay any additional charges. However, if they use the ATM of another bank, a ₦100 fee will apply.”

He emphasised that this adjustment empowers customers to make informed financial decisions based on their preferences.

Additionally, Onojah highlighted an improvement in withdrawal limits, ensuring that customers can access up to ₦20,000 per transaction when using another bank’s ATM. “Previously, customers using a bank’s ATM other than their own often faced withdrawal limits of ₦5,000 or ₦10,000. We have now agreed with banks that customers should always have the option to withdraw up to ₦20,000 at once if they so choose,” he explained.

Onojah further explained the rationale behind the increase in bank charges, despite the existence of other fees such as ATM maintenance. He emphasised that the rising cost of operations necessitated the review, noting that the last revision was in 2019, which took effect in January 2020.

“The economy has changed significantly since then. Inflation rates have surged, and operational costs have increased across various sectors, not just in banking. If charges have remained unchanged for five years, from 2020 to 2025, then it is reasonable to revisit them now. This affects everyone, including us at the Central Bank of Nigeria (CBN). As a CBN official, I also pay these charges; there are no exceptions,” he stated.

Onojah highlighted key operational expenses incurred by banks, including ensuring that ATMs function 24/7, regardless of power supply challenges. He noted that alternative power sources, machine security, and maintenance all contribute to the high cost of sustaining banking operations.

“We have witnessed instances where criminals attempted to steal ATMs. This means banks must invest in security. The reality is that banks are businesses, not government-owned entities. They operate independently, and the government does not subsidise their running costs. Every financial institution has investors who expect returns, and if they continually run at a loss, they will cease to exist. We have seen banks shut down in the past, and the  effects on the economy and individuals were devastating,” he explained.

He further noted that economic realities indicate a general rise in costs, reinforcing the banks’ position that higher operational expenses are not merely a ploy to extract more from customers.

Explaining the revised charges, Onojah outlined three key categories:

1. On-Us Transactions: Customers withdrawing cash from their own bank’s ATMs, whether at a physical branch or a remote location, will not incur any fees.
2. Not On-Us Transactions: This applies when a customer uses their bank card at another bank’s ATM, either within that bank’s premises or at a remote location. He noted that charges begin at this point.
3. Off-Site Withdrawals: According to him, If an ATM is located outside any banking premises, such as in hotels, shopping plazas, or other remote locations, a fee structure applies which  is the ₦100 for non-bank ATMs.

Additionally, he stated, “Customers will receive a prompt asking if they agree to pay a surcharge of ₦500 before proceeding with the transaction. If the customer does not accept, the ATM will not dispense cash. But as long as that ATM belongs to your bank, you don’t pay anything. The choice remains with the customer. However, in all these cases, cash availability is guaranteed.”

The surcharge is for maintaining ATMs located outside bank premises. According to Onojah, maintaining a machine outside a bank’s premises attracts extra costs, increased vigilance, enhanced security, and additional expenses. “In some cases, financial institutions may even need to pay for the space where the machine is installed. It is an extra cost to the operator,” he explained.

He also encouraged Nigerians to play an active role in ensuring proper implementation. “You are also an agent of the CBN. If you visit an ATM and genuinely find no cash, report it to the Consumer Protection Department. We are ready to take action,” he stated.

Onojah further clarified that the new directive does not affect over-the-counter transactions in banks. “Whatever regulations exist concerning over-the-counter transactions remain unchanged by this circular,” he added.