A number of ATMs in Nigeria are experiencing a significant decline, with transaction volumes dropping nearly 20% to ₦12.21 trillion ($8 billion) in the first half of 2024, according to the Central Bank of Nigeria (CBN).
This is not limited to Nigeria; it is a global phenomenon. A report from an insights firm indicated that the total number of ATMs worldwide have been decreasing since 2021.
Banks and financial institutions globally are scaling back on ATM investments due to high operational costs, maintenance challenges, and changing customer behaviors.
In Nigeria, Point of Sale (PoS) agents have emerged as a crucial alternative, providing accessible and reliable cash withdrawal options. This shift became more apparent during the 2023 cash crisis, when limits on ATM withdrawals by banks led customers to turn to PoS operators. Fintech companies such as Paga and OPay contributed to this trend by deploying thousands of PoS devices, further integrating them into Nigeria’s cash economy.
Recent directives from the CBN, which require banks to ensure their ATMs are stocked with cash while capping PoS agent daily limits at ₦1.2 million ($779), may be an attempt to restore balance. However, it remains uncertain whether these measures will be effective.
PoS agents, already a central part of Nigeria’s financial system, are likely to pass any increased costs onto consumers, solidifying their position in the market.
The broader question is whether the decline of ATMs represents a technological failure or a strategic decision by banks to avoid maintaining costly infrastructure. With the growing presence of PoS machines, it remains to be seen whether Nigerians will return to ATMs or if the cash economy is undergoing a permanent shift.
