Aftermath of ₦100 withdrawal charges: has ATM service improved in Nigeria?

Starting March 1, 2025, commercial banks nationwide implemented a ₦100 charge on transactions made at Automated Teller Machines (ATMs) belonging to other banks, following new guidelines issued by the Central Bank of Nigeria (CBN).

A circular released by the apex bank on February 10, 2025, outlined the revised fee structure. Withdrawals made from a customer’s bank machine will remain free of charge, but using another bank’s ATM will now attract a ₦100 fee per withdrawal of ₦20,000 or less at on-site ATMs, that is, those located within bank premises.

Off-site ATMs, positioned at locations such as shopping malls, fuel stations, and public spaces, will carry an additional ₦500 surcharge per transaction. For international withdrawals, charges will now reflect cost recovery, meaning customers will bear the exact fee imposed by the international acquiring bank.

This policy change also eliminates the three free monthly withdrawals previously allowed for customers using other banks’ ATMs. The CBN justified this decision by citing “rising operational costs” and the need to improve ATM service efficiency within the banking industry.

Are ATMs more functional? What users say

It may be too early to make any judgments, but a Technext survey among Nigerians revealed that 62.5% of respondents rarely use ATMs, signalling a shift in withdrawal habits—but that is not a recent development.

When asked about the functionality of ATMs in their areas, over 50% admitted that while some machines work, they are often unreliable.

Despite the CBN’s assurance that the new charges would improve services, 75% of respondents said they observed no improvements since the announcement.

Frustration over the policy is further compounded by the economic strain on households. A staggering 85% believe the charges are unfair, especially when combined with soaring prices of essential goods and services.

Although POS transactions already dominate the informal cash withdrawal market, the survey revealed mixed reactions regarding a switch from ATMs.

Below is a summary of other findings from the survey:

• Only 12.5% of respondents currently rely on POS agents.
• 37.5% have now switched to POS due to the new ATM charges.
• Over 50% were already using POS before the new policy was introduced.
• 37% say they will not switch to POS, opting instead for other alternatives like mobile transfers.

Read also: CBN to sanction banks forcing customers to withdraw below ₦20,000 at ATMs

ATM usage habits and observations

Visits to multiple ATM locations suggest that queues remain largely unchanged. However, conversations with users reveal growing dissatisfaction. Many Nigerians now say they will reduce their usage altogether, opting instead for mobile banking or cashless transactions to avoid unnecessary charges.

Social media responses also reflect a deep-seated frustration. Users have described the policy as another financial burden imposed on citizens who are already struggling with multiple deductions, taxes, and rising costs.

What Nigerians are saying

We asked the survey participants about their thoughts on the new charges. Here are some sample responses:

- "POS is the better option now. At least the charges vary depending on how much you withdraw."

- "ATMs should be dispensing ₦40,000 per withdrawal if banks want to justify these new charges."

- "If you're going to charge more for a service, it should at least be quality-driven and reliable."

- "This new measure only adds more pressure on Nigerians when the economy is already declining. CBN should have explored alternative solutions before imposing this charge."

- "There are ways to improve ATM services without extra costs, such as withdrawal controls and better maintenance."

In addition, we gleaned a couple of social media reactions:

- @Maxvayshia: "It has not yet dawned on Nigerians the extent to which we are being ripped off with bank charges daily and per second."

- @segunizzy: "They haven’t realised what CBN has implemented is a criminal way of collecting money. The government keeps taking from people who already have nothing."

- @Chrixkhalifa21: "Telecom tariffs have gone up, now ATM charges too... yet we see no meaningful development from these increases."

- @Idreesdeedat: "This is tyranny! ₦500 just to withdraw cash outside your bank? After all the maintenance charges, quarterly charges, and deductions? The poor can’t even breathe anymore."

- @BAkujobi57354: "Where is the Nigeria Labour Congress? How can you sit back and watch the poor masses pay through their noses? This is a real issue, not just telecom tariffs!"

Why this matters

For many Nigerians, ATMs are no longer the go-to option for cash withdrawals.

The rapid expansion of POS agents across the country has already shifted withdrawal habits, with many opting for the convenience of nearby kiosks instead of waiting in long ATM queues.

The introduction of these new charges will likely accelerate this shift. Many Nigerians will abandon ATMs entirely, especially in areas where bank-owned machines are scarce. Small business owners, students, and daily wage earners who frequently make low-value withdrawals may find these new fees unsustainable.

The intended goal of improving efficiency remains in question. Instead of enhancing services, the policy might push more Nigerians toward POS agents, who already impose service fees, or force them to rely on cashless transactions in an economy where cash still dominates daily trade.