In a move aimed at enhancing the efficiency of Automated Teller Machine (ATM) services and addressing rising operational costs, the Central Bank of Nigeria (CBN) has issued a circular revising the ATM transaction fees applicable in Nigeria. This review is detailed in the circular numbered FPR/DIR/GEN/CIR/001/002, dated February 10, 2025, and will take effect from March 1, 2025.
Overview of the Revised ATM Transaction Fees
The CBN has reviewed the ATM transaction fees prescribed under Section 10.7 of the extant CBN Guide to Charges by Banks, Other Financial, and Non-Bank Financial Institutions, 2020.
Below is a summary of the revised ATM transaction fees:
- On-Us Transactions: This refers to withdrawals made at the ATM of the customer’s own bank. Under the new directive, these transactions remain free of charge.
- Not-On-Us Transactions: These are withdrawals made at another bank’s ATM (different from the customer’s bank). The charges are as follows:
- On-site ATMs: These are ATMs located within the premises of the bank or financial institution that owns them. For example, an ATM inside a bank branch or within the bank’s compound. A charge of ₦100 per ₦20,000 withdrawal.
- Off-site ATMs: These are ATMs situated outside the bank’s premises, such as those at malls, airports, or other public places, but operated by the bank. A charge of ₦100 plus a surcharge of not more than ₦500 per ₦20,000 withdrawal. The surcharge, which is an income of the ATM deployer/acquirer, must be disclosed at the point of withdrawal.
- International Withdrawals (Debit/Credit Card): For international withdrawals using debit or credit cards, the charges are based on the exact cost set by the international acquirer (Cost Recovery Basis).
Previously, ‘On-Us’ transactions were also free of charge. For ‘Not-On-Us’ transactions, customers were charged ₦35 per withdrawal after the third transaction within a month, regardless of whether the ATM was on-site or off-site. International withdrawals were charged at the rate set by the international acquirer, similar to the new guideline.
Implications for Bank Customers and Financial Institutions
This review impacts both financial institutions and bank customers in Nigeria. The revised charges are expected to accelerate the deployment of ATMs across Nigeria by making off-site ATMs more profitable for deployers. Customers are advised to be aware of the potential charges associated with Not-On-Us transactions, especially when using off-site ATMs. On the other hand, financial institutions are expected to transparently disclose the surcharge on off-site ATM withdrawals.
Why This Matters
The revision is part of CBN’s continued efforts to improve banking infrastructure, promote transparency in financial transactions, and encourage the usage of ATMs across the country. The initiative is also expected to incentivize financial institutions to increase the deployment of ATMs, thereby enhancing access to cash withdrawal services nationwide.
CONCLUSION
As the new ATM transaction fees take effect from March 1, 2025, it is crucial for customers and financial institutions to stay informed about these changes. For bank customers, understanding the fee structure helps in making cost-effective withdrawal decisions, while for financial institutions, compliance with the CBN directive is essential for regulatory adherence and customer satisfaction. This revision by the CBN reflects the evolving dynamics of the banking industry and aims to balance operational costs with customer accessibility.
