Bank customers across Nigeria have expressed frustration over the Central Bank of Nigeria’s (CBN) recent upward review of Automated Teller Machine (ATM) withdrawal charges. Many see the move as a contradiction of the CBN’s financial inclusion and cashless economy policies, arguing that it places an additional financial burden on Nigerians already grappling with the rising cost of living.
This article explores customer reactions, the policy’s implications, and an analysis of the new charges to help users better understand the CBN’s decision and its potential impact.
Customers’ Reactions to the New Charges
Many bank customers interviewed by the News Agency of Nigeria (NAN) voiced concerns that the increased withdrawal charges could push people further away from banking services and discourage digital transactions. Here’s a breakdown of key customer reactions:
1. Concerns from Small Business Owners
- Catherine Itoha, a civil servant, criticized the new charges, stating that they would discourage financial inclusion among rural traders who already prefer cash transactions.
- She shared how she spent N4,000 to withdraw N90,000 at a Point of Sale (PoS) terminal due to traders’ insistence on cash payments.
2. Impact on PoS Transactions
- Davis Agede, a former banker, pointed out that PoS operators would likely raise their withdrawal charges, further burdening customers and creating more financial hardship.
3. Small Business Owners Keeping Cash at Home
- Hajia Kudirat Aminu, a trader, criticized the decision, saying it had forced her to keep cash at home instead of depositing it in a bank.
- She believes this move will discourage many small business owners from using bank accounts altogether.
4. Impact on Students
- Catherine Nnaji, a student, described how the increased withdrawal fees posed additional financial stress.
- She urged the CBN to reconsider the policy, as many students rely on other banks’ ATMs due to limited access to their own bank’s machines.
5. General Public Outcry
- Kayode Are, another bank customer, expressed frustration at the continuous rise in charges across different sectors, stating:
“Does the government want to kill us with taxes? How will the poor masses survive?”
Also Read : CBN Announces New ATM Fees: How Will It Affect You? – Effective March 2025
CBN’s New ATM Withdrawal Charges
The CBN, in a circular released on February 10, 2025, announced the implementation of the new charges effective March 1, 2025. The apex bank justified the decision by citing the rising cost of financial services and the need to enhance ATM operations.
The revised charges are outlined as follows:
| Transaction Type | New Charge | Details |
|---|---|---|
| On-Us Transactions (withdrawals from a customer’s bank’s ATM) | No Charge | No fees for using the customer’s own bank ATM. |
| Not-on-Us Transactions (withdrawals from another bank’s ATM at on-site locations) | N100 per N20,000 | Customers withdrawing from a different bank’s on-site ATM will be charged. |
| Withdrawals from Off-Site ATMs | Additional N500 per N20,000 | Surcharge applies to withdrawals from ATMs located outside bank premises. |
CBN also instructed that all charges be disclosed to customers at the point of withdrawal to ensure transparency.
Table Analysis: Comparison of Old vs. New ATM Charges
To provide more clarity, here’s a comparison of the previous ATM withdrawal charges and the new charges introduced by the CBN:
| Transaction Type | Old Charge (2024) | New Charge (2025) | Change |
|---|---|---|---|
| On-Us Transactions | No Charge | No Charge | No Change |
| Not-on-Us Transactions | N65 per withdrawal | N100 per N20,000 | +53.85% increase |
| Off-Site ATM Withdrawals | No Surcharge | Additional N500 | New Charge Introduced |
The increase in Not-on-Us charges and the introduction of an off-site ATM surcharge have drawn the most criticism from customers.
Implications of the New Charges
1. Increased Reliance on Cash Transactions
Customers are concerned that the increased charges will push more Nigerians toward cash-based transactions, undermining the CBN’s push for a cashless economy. Many small business owners and traders, who are already skeptical about using banking services, may now choose to avoid banks altogether to avoid paying higher fees.
2. Strain on Low-Income Earners
The increased charges could disproportionately affect low-income earners who depend on small withdrawals to manage their daily expenses. For those who need frequent access to small amounts of cash, the cumulative cost of withdrawal charges could become a significant burden.
3. Potential Impact on Financial Inclusion
One of the CBN’s primary goals has been to promote financial inclusion by encouraging unbanked Nigerians to adopt banking services. However, the higher charges may discourage new customers from opening bank accounts, particularly in rural areas where cash remains the preferred mode of payment.
4. Higher PoS Transaction Costs
PoS operators are likely to pass on the increased ATM charges to their customers. This could result in higher fees for PoS withdrawals, further increasing the cost of accessing cash for everyday transactions.
CBN’s Justification and Public Criticism
The CBN has defended its decision to increase ATM withdrawal charges, citing the rising cost of financial services and the need to enhance the efficiency of ATM operations. According to the apex bank, maintaining ATM infrastructure and ensuring the availability of cash at ATM locations has become more expensive, prompting the upward review of charges.
However, critics argue that banks should absorb the additional costs rather than pass them on to customers. Many customers believe that the charges contradict the government’s stated commitment to reducing poverty and promoting financial inclusion.
Recommendations for CBN
Several stakeholders have offered recommendations for the CBN to mitigate the negative effects of the new charges:
1. Review the New Charges
Many customers and advocacy groups have called on the CBN to reconsider the new charges, particularly the off-site ATM surcharge. A reduction or elimination of this fee could help alleviate the financial burden on customers.
2. Improve ATM Availability
One way to offset the impact of increased charges is to improve the availability of ATMs nationwide, especially in rural areas. This would reduce the need for customers to use other banks’ ATMs, minimizing Not-on-Us transactions.
3. Promote Digital Alternatives
To encourage digital transactions, banks should offer incentives for using mobile banking, internet banking, and USSD codes. These alternatives could provide customers with cost-effective ways to access their funds without incurring ATM charges.
4. Increase Public Awareness
The CBN should launch public awareness campaigns to educate customers about the new charges and available alternatives. Transparency and clear communication can help build trust and reduce customer frustration.
FAQs on CBN’s New ATM Withdrawal Charges
1. What are the new ATM withdrawal charges in Nigeria?
Under the new CBN policy, customers withdrawing from their bank’s ATMs (On-Us transactions) will not be charged. However, withdrawals from another bank’s ATM (Not-on-Us transactions) will be charged N100 per N20,000, and withdrawals from off-site ATMs will incur an additional surcharge of up to N500 per N20,000.
2. Why did the CBN increase ATM charges?
The CBN cited the rising cost of maintaining ATM infrastructure and improving operational efficiency as the primary reasons for the increase in charges.
3. How will the new charges affect PoS transactions?
PoS operators are likely to pass on the increased ATM withdrawal charges to customers, resulting in higher fees for PoS withdrawals.
4. Will the new charges affect financial inclusion efforts?
Critics argue that the new charges may discourage financial inclusion, particularly among low-income earners and rural traders who prefer cash transactions.
5. What can customers do to reduce ATM withdrawal charges?
Customers can consider using digital banking alternatives, such as mobile banking, internet banking, or USSD codes, to minimize the need for physical cash withdrawals.
Conclusion
The CBN’s new ATM withdrawal charges have sparked widespread criticism from Nigerian bank customers, who see the policy as a contradiction of the government’s financial inclusion and cashless economy goals. The increased charges could lead to greater reliance on cash transactions, strain low-income earners, and discourage the use of banking services.
To mitigate the negative impact, the CBN should consider reviewing the charges, improving ATM availability, and promoting digital banking alternatives. Transparent communication and customer education will also be essential in addressing public concerns and fostering trust in the banking system.
As the debate continues, stakeholders will closely watch how the CBN responds to the growing calls for a review of its ATM withdrawal charge policy.
