Following a lengthy downturn, ATM usage in Nigeria is witnessing a remarkable revival. In just the first quarter of 2025, cash withdrawals through ATMs reached an astounding ₦15.98 trillion (around $10.83 billion), representing a striking 192.7% surge compared to the same period last year.
This resurgence is primarily fueled by new mandates from the Central Bank of Nigeria (CBN), which have tightened regulations on Point of Sale (PoS) agents and instructed banks to broaden ATM deployment nationwide. This strategic pivot aims to restore ATMs as the dominant channel for cash access, reversing the trend that favored PoS terminals for years.
Nigeria’s Revised Cash Withdrawal Cost Calculator
Withdrawals from your own bank’s ATM remain free, but using ATMs of other banks now attracts fees per ₦20,000 withdrawn. See how your PoS expenses compare.
Estimated Annual Withdrawal Costs
Total Annual Withdrawals (104 transactions)
₦1,040,000
Via PoS Agents
₦20,800
Using Your Bank’s ATM (On-Us)
₦0
Other Banks’ ATMs (at branch)
₦10,400
Other Banks’ ATMs (off-site)
₦36,400
*Based on the CBN Circular from February 10, 2025. “On-Us” transactions (your bank’s ATM) are free. “Not-On-Us” (other banks’ ATMs) attract fees of ₦100 (on-site) or ₦350 (off-site, including an average surcharge of ₦250) per ₦20,000 withdrawn.
Tracing the Development of ATMs in Nigeria
The ATM story in Nigeria began in 1989 when Société Générale Bank, a French financial institution, introduced the first machine. The early 2000s witnessed a rapid expansion of ATMs, driven by both commercial banks and independent operators. By 2010, the country had around 7,100 ATMs, which increased to 11,000 in 2011 and reached a peak of 22,600 by 2021.
ATMs were instrumental in ushering Nigerians into the digital banking age, significantly reducing the need for in-branch visits. However, they were often plagued by frequent malfunctions, cash shortages, and network outages, especially during busy periods such as weekends.
By mid-2024, the number of functioning ATMs had dropped to 16,714 from 17,377 the previous year, highlighting a steady decline in their availability.
The Surge of PoS Terminals
PoS technology was introduced in Nigeria in the early 2000s with the aim of extending financial services to underserved communities. The real breakthrough came with fintech firms like Moniepoint, OPay, and PalmPay entering the market.
In 2018, Nigeria had about 400,000 PoS terminals, mostly located in major retail outlets and affluent commercial districts. By January 2022, this figure had soared to 1.37 million, propelled by fintech innovation and broader acceptance.
During the 2023 naira liquidity crunch, PoS terminals ballooned to 2.32 million, and by March 2025, they had surged to 8.36 million. These devices became crucial for financial inclusion, eventually surpassing ATMs as the preferred method for cash access.
The Transition from ATMs to PoS
The Central Bank of Nigeria began monitoring ATM and PoS transaction volumes in 2009. In the first quarter of that year, ATM transactions totaled ₦137.72 billion ($93.35 million), vastly overshadowing the ₦3.51 billion ($2.38 million) processed through PoS terminals by more than 3,800%.
The Turning Point in Cash Transactions
A comparison of PoS and ATM transaction volumes in Nigeria (Q1 data)
*Data derived from CBN reports as cited by TechCabal.
CBN’s Initiative to Revitalize ATM Usage
In light of the declining ATM numbers, the CBN has rolled out policies designed to rejuvenate ATM usage while controlling the rapid proliferation of PoS terminals.
A recent draft guideline requires banks and card issuers to deploy one ATM for every 5,000 active payment cards issued.
The CBN stresses that these measures are vital “to establish minimum standards for ATM deployment, operation, and maintenance, and to improve ATM accessibility in both urban and rural areas.”
Implementation will be phased: 30% compliance by 2026, 60% by 2027, and full adherence by 2028. With over 320 million active accounts as of March 2025, Nigeria would need roughly 64,011 ATMs to meet these requirements if every account holder is issued a card.
To incentivize ATM infrastructure growth, the CBN revised withdrawal fees in February 2025, capping charges at ₦500 per transaction.
The regulator also mandates strategic ATM placement to ensure easy access, consistent cash availability, and guarantees refunds for failed transactions within 24 to 48 hours.
Recently, the CBN fined nine banks a total of ₦1.35 billion ($915,037) for failing to maintain adequate cash levels in their ATMs.
Meanwhile, the PoS and agent banking sectors face stricter controls. The CBN has imposed a daily transaction limit of ₦1.2 million ($813.37) per agent and restricted terminals to operate within a 10-meter radius.
From April 2026, agents will be required to affiliate with only one principal, ending the practice of owning multiple terminals.
While these steps aim to reduce fraud and enhance regulatory compliance, they also impose tighter restrictions on a system that has become crucial for cash access, particularly in rural and peri-urban communities.
Future Outlook
The explosive growth of PoS terminals has sparked discussions about their cost efficiency, with many Nigerians questioning the fees linked to cash withdrawals and their effect on ATM usage.
Revitalizing the ATM network could improve cash accessibility for many users, often at little or no cost, since withdrawals from one’s own bank remain free. However, in remote regions where agent banking has thrived, ATMs may still be scarce, as banks remain reluctant to invest in less profitable areas.
For financial institutions, complying with these new mandates will require increased investment in infrastructure and maintenance, especially in underserved locations. Whether this policy shift will stabilize the financial ecosystem or slow the progress made in financial inclusion over the past decade remains to be seen.
What is clear is the CBN’s dedication to expanding ATM availability while curbing PoS dominance, aiming for a future where digital transfers eclipse cash transactions.
Note: Exchange rate used is ₦1,475.35 to $1.