Nigeria’s PoS Operators to Enforce Price Hike Amid Rising Tensions.
Despite opposition from regulators, fintech companies, and customers, Point-of-Sale (PoS) operators across Nigeria are moving forward with a price hike on withdrawal fees. This decision has sparked widespread debate over its impact on financial inclusion and the sustainability of the agency banking model.PoS agents, integral to bridging the gap in cash access across Nigeria, are relied upon in regions where banks and ATMs are sparse. For instance, while Lagos boasts over 320,000 PoS agents, the city has less than 2,000 physical bank branches. Across the country, many Nigerians turn to these agents for convenience.The new pricing model, introduced by the Association of Mobile Money and Bank Agents in Nigeria (AMMBAN), will see charges for withdrawals under ₦5,000 double to ₦200, while fees for transactions between ₦18,000 and ₦20,000 will rise to ₦800. These increases significantly exceed the Central Bank of Nigeria’s (CBN) recommended 1% fee for PoS transactions.
Pushback from Fintechs and Regulators.
Major fintech companies, including Moniepoint, OPay, and PalmPay, have voiced their disapproval, citing a lack of consultation. While these firms prioritize affordability as their unique selling point, the new rates threaten to undercut this advantage. Regulators, such as the Federal Competition and Consumer Protection Commission (FCCPC), have also intervened, warning against the price increase and threatening sanctions.For consumers already grappling with economic pressures, such as the removal of fuel subsidies and rising inflation, the price hike could prove burdensome. While some urban residents may resort to using ATMs to avoid the higher fees, rural customers, where access to banks is limited, often have no alternative.
Mixed Reactions from Agents
Not all PoS operators are in favor of the new charges. Some see the move as counterproductive, fearing it could alienate customers. Operators like Mrs. Adetunji, who doubles as a PoS agent in Lagos, have expressed concerns about losing trust within their communities. Others, such as Shola Hafeez in Ikorodu, have chosen to maintain existing rates, citing loyalty to their customer base.PalmPay noted that while it respects the autonomy of agents, it remains committed to keeping its fees as low as possible to maintain competitive rates. Similarly, OPay warned that a drop in patronage due to higher fees could force the company to introduce charges for services previously offered free to agents.
Economic Realities vs. Consumer Resistance
The price increase highlights the broader economic struggles faced by Nigerians. While operators cite rising operational costs as justification, customers are pushing back due to reduced purchasing power and a higher cost of living. This tension underscores the delicate balance between sustaining the agency banking model and maintaining affordability for users.In rural areas, where PoS agents often serve as the sole financial lifeline, customers have little choice but to comply. For instance, in Akure, a resident noted that accessing the nearest bank required a two-hour commute, making PoS agents indispensable despite the higher fees.
Outlook for the Agency Banking Model
The agency banking model has grown rapidly in Nigeria over the past five years, helping to bridge the gap in financial inclusion. However, the price hike risks alienating customers and undermining the trust built by agents. If customers opt for cheaper alternatives, it could force operators to reconsider their pricing strategy.While the new rates are intended to address rising operational costs, the absence of cash scarcity—a key factor in previous price surges—makes consumer resistance stronger this time. Whether the model can withstand these pressures depends on how effectively operators and associations address the concerns of both agents and customers.Ultimately, while PoS agents remain an essential part of Nigeria’s financial ecosystem, their ability to balance cost and accessibility will determine their long-term viability.
