The Central Bank of Nigeria (CBN) has announced the removal of the three free withdrawals previously granted to customers using ATMs from other banks. This new policy, outlined in a circular signed by Acting Director John S. Onojah of the Financial Policy and Regulation Department, takes effect on March 1, 2025.
Reasons Behind the Policy Change
According to the CBN, this decision stems from increasing operational costs and the need to enhance ATM efficiency. By eliminating free withdrawals, the bank aims to streamline the usage of ATMs while ensuring sustainability for financial institutions.
The circular states, “The three free monthly withdrawals for Remote-On-Us (other bank ATMs) under Section 10.6.2 of the Guide will no longer apply.”
New ATM Withdrawal Charges
The CBN clarified that customers using their bank’s ATMs (‘On-Us’ transactions) will continue to enjoy fee-free withdrawals. However, withdrawals from other banks’ ATMs (‘Not-On-Us’ transactions) will attract charges:
- On-site ATMs (within bank premises): N100 per N20,000 withdrawal.
- Off-site ATMs (outside bank premises): N100 per N20,000 withdrawal, plus an extra surcharge of up to N500.
For international ATM withdrawals, charges will depend on the fees set by the foreign financial institution processing the transaction. The CBN noted that the surcharge is income for ATM deployers and must be disclosed to customers before completing a withdrawal.
Impact on Nigeria’s Financial Landscape
The CBN expects this policy to encourage more ATM installations nationwide while ensuring banks apply the correct service fees. However, recent trends suggest that Nigerians are shifting away from ATMs in favor of Point-of-Sale (PoS) terminals.
By mid-2024, the number of active ATMs in Nigeria had dropped to 16,714, marking a 3.82% decline from 17,377 in late 2023. Meanwhile, PoS terminal usage surged, with active devices reaching 5.56 million by the end of 2024—a staggering 127.07% increase from the previous year.
