Frustrations continue to rise among Nigerians as they face persistent challenges accessing cash due to limits on ATM withdrawals and Point-of-Sale (POS) operations.
Despite the Central Bank of Nigeria’s (CBN) measures to ensure cash flow, the unavailability of cash remains a significant issue, affecting ordinary Nigerians and businesses alike.
The situation has led to inflated charges on everyday bank users.
On the other hand, POS services, an alternative for cash withdrawals and other transactions sustainability are threatened by high operational costs and regulatory caps.
Many Nigerians have voiced their concerns, citing the financial and emotional toll of the cash crunch.
Dinma Okonkwo, a Lagos resident who works in Opebi, is one of many Nigerians grappling with the daily challenges of accessing cash. She shared her frustrations, explaining how she could only withdraw N2,000 at a time from an ATM near her workplace.
“I needed N10,000, but the machine only allowed me to withdraw N2,000 per transaction. I had to make five separate withdrawals,” she lamented. The inconvenience of multiple withdrawals on a single use has become a common complaint among ATM users.
Funmi, who works around Shasha, expressed frustration with the N35 charge for withdrawals after the third transaction each week which she normally exhausts in a single day.
“The N35 charge for withdrawals after the third transaction in a week is not convenient. Where I live and work, there is no ATM of my bank, so I’m forced to use other banks’ ATMs. With the N5,000 withdrawal limit, I quickly exceed the free transaction limit, sometimes in a single day,” she said.
Despite the measures to ensure cash flow, the unavailability of cash remains a significant issue, affecting ordinary Nigerians and businesses alike.
ATMs remain a lifeline for many Nigerians
For many Nigerians, ATMs remain an essential tool despite their limitations. An elderly man, Jimoh Ayodele’s reliance on ATMs highlights this dependency.
“I find it difficult to operate the bank app so withdrawing cash is simpler for me,” he said.
He added that he often uses ATMs as his primary means of accessing cash.
- Mrs. Chinwe a trader at Onigbgbo market also acknowledged the role of ATMs, she criticized mobile transfers as an alternative to cash withdrawal for safety concerns saying that there have been incidents of theft through banking apps.
- She recalled how a close friend fell victim to theft where her phone was stolen and used to transfer all the money from her banking apps, including a crucial N500,000 contribution made from their thrift “Ajo” committee.
“Since then, I’ve avoided banking apps altogether, I now rely on cash from ATMs, if the queue is long I send my children. I also avoid taking transfers from my customers as much as possible”
These accounts demonstrate the indispensable role ATMs play, even as users face significant hurdles.
POS operators struggle
As ATMs struggle to meet the demand for cash, Point of Sale (POS) operators have become an alternative for many Nigerians. Nairametrics sought opinions of POS operators on how they sort their cash considering the limitations.
- Fatima, a POS operator at Toyin Roundabout shared her challenges and how she manages them. She typically sources between N500,000 and N700,000 from other sources, incurring charges of N10,000 to N15,000 depending on the amount needed.
“What ATMs dispense isn’t enough for my business, I usually collect between N500,000 and N700,000 from other sources, but I pay between N10,000 and N15,000 in charges depending on how much I need.”
Interestingly, this operator works in an area with two banks’ ATMs in close proximity, yet the withdrawal limits remain insufficient for her business’s daily needs.
- Iya Tunde, a POS operator, relies on her husband to source cash from petrol stations. She however did not disclose if the cash her husband sought came at a price. “He handles it for me, so I’m not aware of the charges,” she said.
- Chidi, another POS operator, shared a different approach to managing the limitations.
“I’ve built strong relationships with business owners who, instead of depositing their daily earnings in the bank, give me the cash, In exchange, I transfer the equivalent amount to their accounts. It’s a win-win for both of us,” he said
This discrepancy between the availability of cash in ATMs and their withdrawal limits emphasizes the ongoing strain on both customers and businesses.
Bankers blame CBN policy.
Bankers have, however, absolved themselves of af any blame in the cash scarcity saga, blaming it on the CBN’s cashless policy.
According to an official of one of the tier-1 banks, who requested anonymity, the cash shortages are fuelled by regulatory policies.
“Since the beginning of the CBN cashless policy, we’ve had persistent cash shortages. People are holding onto cash instead of depositing it in banks. To regulate cash flow, we set ATM withdrawal limits, such as N5,000-N10,000 per transaction in some cases. This ensures more people can access cash, albeit in smaller amounts,” he said.
- Corporate account holders, such as POS operators, often have higher withdrawal limits, allowing them to access up to N500,000 daily, provided the banks have the cash available.
“Some banks have set their own ATM limits at N40,000 per day to ensure cash is distributed more evenly,” the banker added.
- Another banker also attributed the issue to the Central Bank of Nigeria’s push for a cashless policy. “The demand for cash through ATMs is simply outpacing supply. While banks do load ATMs regularly, the demand is often much higher than what can be supplied at any given time,” he said.
The banker emphasized the role of agency banking as an alternative. “Agency banking allows authorized individuals or businesses to provide banking services such as withdrawals, deposits, and fund transfers. POS terminals are essentially part of this model,” he explained.
Banks provide the infrastructure, like terminals, while agents use their devices to conduct transactions.
The shift towards a cashless policy is not a case of banks neglecting their ATMs, the banker noted. “The Central Bank’s initiative is pushing for a cashless system, and alternative channels are being encouraged. However, the demand for cash still outstrips what can be provided via ATMs,” he reiterated.
He encouraged Nigerians to embrace cashless payment methods at points of sale. “Use your ATM at the point of sale to make payments instead of relying on cash. This reduces the strain on the ATM system and aligns with the broader cashless policy initiatives,” he advised.
CBN’s measures to address cash shortages
In September 2024, CBN Governor Yemi Cardoso announced measures to combat cash shortages, including injecting N1.4 trillion into circulation over three months and imposing penalties on non-compliant banks. He emphasized that Deposit Money Banks (DMBs) must ensure adequate cash availability.
Despite these efforts, shortages persisted, prompting additional measures. Starting December 1, 2024, customers were urged to report ATM and branch cash withdrawal issues through designated channels. The CBN vowed to intensify spot checks on DMBs and penalize underperforming institutions.
The CBN also set limits on point-of-sale (POS) transactions:
- N100,000 daily limit per customer
- N1.2 million daily total limit for POS agents
- N500,000 weekly withdrawal cap for customers
Fines of N150 million were imposed on nine DMBs for failing to dispense cash during the festive season, totaling N1.35 billion.
The CBN will collaborate with security agencies to curb illegal cash sales and enforce withdrawal limits, with further sanctions for violations.
The reliance on ATMs and POS operators emphasizes the critical role of cash in Nigeria’s economy, even as the country transitions towards a cashless policy. While ATMs remain a lifeline for many, balancing the cashless policy with the realities of a cash-dependent population remains a delicate challenge.
