CBN’s ATM Fee Hike: A Financial Strain or Necessary Reform? By Rahma Olamide Oladosu
The announcement by the Central Bank of Nigeria (CBN) of the plan to hike ATM transaction fees which took effect from March 1, 2025, sparked widespread concerns across the country. As millions of Nigerians rely on ATMs for their daily financial transactions, this policy change comes at a time when many are already struggling with the pressures of a fragile economy. While the CBN justifies the fee hikes as a necessary response to the rising costs of maintaining ATM infrastructure and improving service delivery, the decision has led to mixed reactions regarding its real impact on ordinary Nigerians.
Under the new policy, while withdrawals from a customer’s own bank’s ATM remain free, transactions above ₦20,000 at on-site ATMs will incur a ₦100 fee. The notable change, however, lies in the increased charges for using off-site ATMs, where customers will pay a ₦100 service fee along with an additional surcharge of up to ₦450 for every ₦20,000 withdrawn. This move replaces the previous policy, which allowed customers three free interbank withdrawals per month. Moreover, international withdrawals will also attract additional charges, further increasing costs for those using Nigerian debit or credit cards abroad.
Governor of the CBN, Yemi Cardoso, has defended the policy by citing the rising operational costs and the need for banks to better manage ATM services. The CBN believes that the new charges will encourage banks to deploy more ATMs across the country, particularly in underserved areas, thus improving access to cash and reducing overcrowding at existing machines. These justifications aim to address long-standing infrastructure gaps while encouraging investment in banking services across all regions.
For many Nigerians, ATMs are the most accessible and reliable means of withdrawing cash. In an economy where digital banking is still evolving, especially in rural areas, cash remains the preferred medium of exchange. A sudden hike in ATM withdrawal fees may place an additional burden on low-income earners, small business owners, and traders who rely on cash for daily transactions. The removal of the three free interbank withdrawals per month could also affect customers who do not have convenient access to their own bank’s ATMs.
In response to these developments, a growing number of Nigerians are turning to Point of Sale (POS) terminals as a practical alternative to ATMs. POS agents, now deeply embedded in the financial fabric of both urban centers and remote communities, offer accessible cash withdrawal services, often at more flexible and affordable rates. For many consumers, POS outlets are not only closer and more convenient than bank ATMs, but they also help avoid long queues and network issues commonly associated with ATMs. This shift underscores the increasing relevance of agent banking and fintech innovations in Nigeria’s financial ecosystem.
The use of POS terminals has also proven crucial in promoting financial inclusion. With banking halls and ATM locations sometimes sparse in rural areas, POS agents bridge the gap by bringing financial services closer to the people. They also offer additional services such as transfers, bill payments, and airtime top-ups, reducing the need for traditional banking interactions. As the cost of ATM withdrawals rises, this alternative is expected to gain even more traction, providing a practical, community-based solution to cash access challenges.
The economic context in which this policy is being introduced is a critical factor. Nigeria is grappling with inflation, a weakening naira, and a rising cost of living. For many, wages are stretched thin, and any additional expense can feel like a burden. It is important, therefore, that financial reforms are carefully structured to support, not strain, the daily financial activities of citizens.
The CBN’s goal of financial inclusion remains a key national objective. For years, the CBN has promoted efforts to bring more Nigerians into the formal banking sector. While there is concern that higher fees could dissuade some, particularly in rural areas, from maintaining bank accounts, the success of alternatives like POS agents shows that Nigerians are finding new ways to engage with the financial system.
The move also reflects broader CBN goals of encouraging a cashless society. Over the years, the apex bank has rolled out several policies aimed at promoting digital payments and reducing cash dependency. Though some challenges persist, such as trust in digital platforms and occasional transaction failures, the continued efforts by banks and fintech companies are helping bridge the gap and improve user experience.
To complement the new fees, transparency and communication are vital. Nigerians have long voiced concerns over unclear bank charges. As such, financial institutions should clearly explain the new fees and provide tools that help customers make informed financial decisions. Educational initiatives on cost-saving banking practices and the benefits of digital finance will be essential in the months ahead.
The Nigerian government and regulatory bodies also play a role in ensuring that financial reforms do not disproportionately affect vulnerable populations. Close monitoring of the policy’s impact, along with input from consumer advocacy groups, can help fine-tune its implementation for the benefit of all.
Under the leadership of Yemi Cardoso, the CBN has expressed a commitment to modernising Nigeria’s financial system. The recent ATM fee revision is part of this broader strategy. While its full impact remains to be seen, continued collaboration between banks, regulators, and the public will be essential to ensuring that reforms serve both institutional sustainability and the financial well-being of everyday Nigerians.
