Raising ATM Charges To Scale Up: What It Means For Nigerians

In a bold move that is set to redefine banking transactions in Nigeria, the Central Bank of Nigeria (CBN) has introduced a significant hike in Automated Teller Machine (ATM) withdrawal charges. The latest directive, effective from March 1, 2025, eliminates the previous three free withdrawals per month from another bank’s ATM and introduces a sharp increase in fees.
The increase, pegged at 185.7 per cent for standard not-on-us withdrawals and an astronomical 1,614 per cent for off-site withdrawals, is expected to change the financial landscape for millions of Nigerians.
Previously, bank customers were entitled to three free ATM withdrawals per month at machines operated by banks other than their own, after which they were charged a fee of N35. However, under the new structure, every withdrawal from another bank’s ATM will now incur a charge of N100 per N20,000 withdrawal. In addition, withdrawals from ATMs outside bank premises will now attract a surcharge of N500 in addition to the N100 transaction fee, bringing the total charge to N600 per N20,000 withdrawal.
A circular signed by John Onoja, Director of the Financial Policy and Regulation Department at the CBN, emphasised that the decision was driven by rising operational costs and the need for improved efficiency in the banking sector. According to the directive, the new structure is aimed at accelerating the deployment of ATMs while ensuring that financial institutions apply appropriate fees for ATM services.
Nigeria’s ATM withdrawal fee policies have seen several changes over the years. In 2014, the CBN reintroduced ATM withdrawal charges, imposing a N65 fee on the fourth withdrawal in a month from an ATM belonging to another bank.
This fee structure was revised in 2019 when the regulator reduced it to N35 after the first three transactions. The latest directive, however, scraps free withdrawals altogether, making not-on-us transactions immediately chargeable.
The move represents a return to cost-sharing between banks and customers, a policy reversal that the CBN says is necessary to maintain the sustainability of ATM services. According to the apex bank, the rising cost of maintaining ATM networks has made it imperative for banks to pass on some of the financial burden to customers.
For the average Nigerian bank customer, these new charges could significantly impact cash withdrawal habits. With inflation already eating into disposable income, an increase in ATM fees will add an extra layer of financial burden on those who rely on cash transactions.
Some customers, particularly those in rural and semi-urban areas, may find the new charges prohibitive. Many Nigerians do not have easy access to their bank’s ATMs and often rely on third-party machines. With the elimination of free withdrawals, customers who frequently withdraw cash from other banks’ ATMs will have to either absorb the cost or seek alternatives such as Point-of-Sale (PoS) operators.
The CBN has been actively promoting a cashless economy, encouraging digital transactions over cash withdrawals. The increase in ATM charges may serve as an additional push toward digital banking solutions such as mobile transfers, online banking, and USSD transactions.
However, the declining number of ATMs in Nigeria paints a different picture. As of June 30, 2024, the country had 16,714 active ATMs, a 3.82 per cent drop from the 17,377 available in December 2023. ATM transaction volumes also declined, falling from 519.52 million transactions in 2023 to 496.43 million in 2024.
Meanwhile, the value of ATM transactions dropped by 16.6 per cent, from N14.63 trillion in 2023 to N12.21 trillion in 2024. This downward trend indicates that fewer people are using ATMs, due to inaccessibility and lack of cash at the available ATMs as well as the increasing adoption of digital banking and alternative payment methods
While the CBN argues that the new charges will encourage banks to deploy more ATMs, there is concern that customers may simply avoid them altogether, opting instead for PoS transactions or online payments. If this happens, banks may need to rethink their ATM deployment strategies or risk making ATMs less relevant in Nigeria’s evolving financial landscape.
As March 1, 2025, approaches, bank customers will need to reassess their banking habits. Many may shift to PoS agents or increase their use of mobile banking and online transfers. For banks, the challenge will be to balance profitability with customer satisfaction, ensuring that the new charges do not push customers away from formal banking channels altogether.
The ultimate impact of the new ATM charges will depend on how consumers respond. If digital transactions see a significant uptick, Nigeria’s move toward a cashless society may accelerate. However, if cash dependency remains high, the cost of banking for everyday Nigerians will continue to rise.
One thing is however certain, the days of free ATM withdrawals from other banks are over, and Nigerians must now navigate the financial landscape with greater awareness of the costs attached to their banking choices.