On February 10, 2025, the Central Bank of Nigeria (CBN) introduced a new ATM withdrawal fee structure set to take effect from March 1, 2025.
The goal?
To reduce operational costs for banks and improve ATM access nationwide.
This announcement has sparked conversations among consumers, financial institutions, and industry experts.
While the CBN policy is positioned as a solution to Nigeria’s ATM challenges, a deeper issue remains unaddressed—transaction inefficiencies.
For years, Nigerian banking customers have struggled with ATM-related frustrations, from failed withdrawals to slow dispute resolutions and system downtimes.
Will adjusting fees make ATMs more accessible? Possibly. But will it make transactions faster, more reliable, and hassle-free? That’s a different question.
The Real Issue: Inefficiency Over Cost
Interestingly, NIBSS reported that active bank accounts reached 311.65 million as at December 2024. However, Nigeria has less than 22,000 ATMs, serving a population of over 200 million people and access to cash remains difficult due to frequent cash shortages, connectivity failures, and reconciliation delays.
For many Nigerians, ATM challenges extend far beyond withdrawal fees. In this 2024 report, nearly 30% of ATM transactions failed due to network issues, cash shortages, or other operational failures.
The current system faces persistent challenges, including frequent transaction failures where customers are debited without receiving cash, leading to frustration and financial inconvenience. Dispute resolution is also slow, with refunds for failed withdrawals often taking days or even weeks to process.
Additionally, the limited availability of ATMs—due to high operational costs—prevents banks from expanding their networks, resulting in long queues and restricted access to cash for many customers.
These issues indicate that while fee adjustments may increase ATM installations, they won’t necessarily make transactions more efficient or customer friendly.
Why Fees Alone Won’t Solve the Problem
The new policy is expected to help banks offset the rising cost of ATM maintenance and cash handling, potentially leading to an increase in ATM installations across the country.
However, simply increasing the number of ATMs or the cash within them without improving their reliability will not solve the core issue.
Expanding the number of ATMs won’t be effective if transaction failures remain frequent. Lower fees will have little impact if customers still spend hours trying to withdraw cash. Even with improved infrastructure, adoption will be limited if trust in ATM reliability remains low.
For CBN’s initiative to truly succeed, banks need to go beyond just cost recovery and expansion—they must focus on efficiency, security, and automation in ATM transactions.
Technology as the Missing Link
One of the biggest gaps in Nigeria’s financial system is the lack of real-time, automated transaction processing for ATM withdrawals.
This is where technology can play a transformational role. Several innovative financial solution technologies have the potential to revolutionize ATM efficiency.
However, advancements like AI-driven fraud detection can enhance security by preventing unauthorized withdrawals, while real-time settlement solutions can eliminate delays in refunding failed transactions, improving overall customer experience and trust in the system.
Some Nigerian banks have already adopted blockchain-powered solutions for ATM transactions. These systems enable instant reconciliation and faster refunds when failures occur. Zone Payment Network, among others, has demonstrated how blockchain can streamline payment processing, reducing disputes and enhancing customer experience.
By integrating blockchain and real-time payment infrastructure, financial institutions can increase efficiency, eliminate delays, and restore consumer trust in ATM transactions.
A Holistic Approach is Needed
CBN’s new policy is a step in the right direction, but for meaningful, long-term improvements, Nigeria’s banking sector must go beyond fee adjustments.
A combination of regulatory policies and technological innovation is essential to create a system where ATM transactions are not just affordable—but also seamless, fast, and reliable.
To achieve this, key stakeholders must prioritize real-time reconciliation to ensure transaction failures are resolved instantly. Investing in decentralized financial infrastructure can help reduce transaction bottlenecks, while leveraging AI and automation will optimize ATM uptime and minimize failures, ultimately improving efficiency and customer experience.
The Bigger Question
As CBN works to improve ATM accessibility through fee restructuring, financial institutions must consider the bigger picture—does Nigeria’s ATM system need more machines, or does it need better technology to ensure smooth transactions?
If we truly want to enhance financial services, the conversation must shift from fees to efficiency.
Would better technology adoption make a bigger difference than fee restructuring?
