Commercial banks across Nigeria have begun implementing a revised fee structure for Automated Teller Machine transactions following a directive from the Central Bank of Nigeria. Under the new policy, customers withdrawing from their own bank’s ATMs will continue to enjoy free transactions. However, those using ATMs of other banks will be charged ₦100 per withdrawal of ₦20,000 or less at on-site ATMs located within bank premises. Off-site ATMs in public locations such as shopping malls and fuel stations will attract an additional surcharge of up to ₦500 per transaction. International ATM withdrawals will be charged based on cost recovery, with customers bearing the exact fee applied by the international acquirer.
The apex bank, in a circular dated 10 February 2025, cited rising operational costs and the need for improved ATM service efficiency as reasons for the fee adjustment. However, the policy has sparked backlash, with many Nigerians arguing that it disproportionately affects low-income earners. The Socio-Economic Rights and Accountability Project has taken legal action against the CBN, challenging the decision as “unlawful, unfair, unreasonable, and unjust.” The advocacy group has urged the central bank governor, Olayemi Cardoso, to reverse the policy, warning that it could further burden Nigerians already struggling with economic hardships.
Small business owners face added burden with new charges.
Tech entrepreneur Tope Dare has also criticised the revised charges, arguing that they favour wealthier individuals who can afford to withdraw larger sums while penalising those who rely on smaller, frequent withdrawals. He noted that many low-income Nigerians and small business owners often withdraw amounts as low as ₦5,000 or ₦10,000, making the new charges particularly burdensome for them. Critics have also raised concerns that the increased costs could push more Nigerians toward informal cash transactions, undermining the financial inclusion efforts the CBN has been promoting.
In response to the growing opposition, the Acting Director of the CBN’s Financial Policy and Regulation Department, John Onoja, has urged commercial banks to ensure that their ATMs are stocked with cash to prevent unnecessary charges. However, many customers remain sceptical, pointing out that banks have often struggled with cash availability, leading to frequent network failures and ATM downtimes. The new charges, they argue, could further frustrate customers who may find themselves forced to use alternative ATMs even when their bank’s machines are empty.
Rural communities could face greater financial strain with new charges.
Beyond consumer dissatisfaction, financial analysts warn that the policy could have unintended economic consequences, especially in a cash-driven society. Higher withdrawal costs may discourage digital banking adoption, as many Nigerians still rely on cash due to limited access to electronic payment systems. Small businesses, which depend on quick and easy access to cash, may also face disruptions. If traders struggle to withdraw funds affordably, reduced transactions could slow down economic activity in informal markets, where cash remains the primary medium of exchange.
Furthermore, rural communities, where banking Infrastructure is already limited, could be hit the hardest. Many residents rely on ATMs of other banks due to the sparse distribution of bank branches. With the new charges in place, accessing cash may become even more costly, worsening financial exclusion for those already underserved by the formal banking system. Many may be forced to turn to mobile money agents, who often impose higher withdrawal fees, further increasing the cost of cash access. This could push more people toward informal financial networks, which offer little to no consumer protection.
Related Article: New ATM fees threaten digital banking growth
Ultimately, while the CBN argues that the revised fees are necessary to sustain ATM operations, the widespread backlash suggests an urgent need for reconsideration. Critics believe that instead of imposing higher withdrawal fees, banks should explore alternative Revenue sources, improve digital banking infrastructure, and expand financial Literacy initiatives. Without these adjustments, the policy risks placing an additional financial burden on Nigerians at a time when many are already struggling with rising costs and economic uncertainty.