Economist Dr. Augustine Kutu has advised the Central Bank of Nigeria (CBN) and policymakers to address the concerns of Nigerians regarding the new charges on Automated Teller Machine (ATM) transactions.
Under the revised fee structure, which took effect on March 1, 2025, commercial banks are now charging customers N100 per N20,000 withdrawal from on-site ATMs and N600 for off-site ATM withdrawals.
The CBN issued a circular on February 10, 2025, to all banks and financial institutions, announcing the review of ATM transaction fees. According to the new guidelines, withdrawals from one’s own bank ATMs will remain free of charge.
However, customers withdrawing N20,000 or less from another bank’s ATM will incur a N100 fee per transaction. The CBN cited rising costs and the need to improve the efficiency of ATM services in the banking industry as reasons for the new charges.
Citizens express concern
Dr. Kutu, an Assistant Professor at the University of Western Ontario-Canada, noted that while citizens have expressed concerns that the policy reduces their purchasing power, imposes a financial burden, and discourages savings, banks argue that the charges are necessary to offset their operational expenses and stimulate the economy.
“As part of the monetary policy framework, the CBN regulates bank charges and deductions, including those related to cash transactions and account maintenance. These charges vary across banks and depend on the specific type of transaction.”
According to the Central Bank of Nigeria (CBN), the reintroduction of charges on certain cash deposits and withdrawals is to promote a modern and efficient payment system. “It aims to reduce the country’s reliance on cash transactions, which can be costly and hinder economic development,” said Dr. Kutu.
Dr. Kutu emphasized that the policy would likely discourage excessive cash handling, minimize operational costs, and encourage Nigerians to adopt alternative payment methods, such as digital transactions. However, he acknowledged that the country’s current economic climate poses significant challenges to the policy’s effectiveness.
“Paramount among these challenges are security concerns, as electronic payment systems are vulnerable to cyber threats and data breaches. Additionally, unreliable infrastructure, including limited access to the internet and power, hinders the widespread adoption of digital payment methods.
“The low digital literacy, particularly in rural areas, and the recent approval of a fifty percent hike in telecom tariffs may continue to discourage Nigerians from embracing the new policy. To ensure the successful implementation and adoption of the policy, policymakers must first tackle pressing customer concerns, including the steady increase in telecom tariffs, cybercrime fears, and technical issues,” Dr. Kutu said.
What you should know
- He also advised the CBN to consider other measures, such as implementing a downward review of ATM and Point of Sales (POS) transaction service fees, as well as interbank charges, to decrease financial burdens on customers.
- “There should also be increased access to ATMs and POS terminals, particularly in rural areas, to promote financial inclusion,” he said.
Dr. Kutu further urged the development of Information and Communication Technology (ICT) infrastructure in rural areas to bridge the digital divide and facilitate access to digital financial services.
