The Central Bank of Nigeria (CBN) has directed Deposit Money Banks and other financial institutions to refund customers for failed Automated Teller Machine (ATM) transactions within two days.
The directive is contained in a draft guideline released by the apex bank on Saturday, titled “Exposure of the Draft Guidelines on the Operations of Automated Teller Machines in Nigeria.”
Signed by Musa I. Jimoh, Director of the Payments System Policy Department, the document was circulated to banks, payment service providers, card schemes, and independent ATM deployers, with a call for stakeholder feedback by October 31, 2025.
Under the draft rules, failed “on-us” transactions—where customers use their own bank’s ATM—must be reversed instantly. Where technical issues prevent immediate reversal, the bank must manually refund the customer within 24 hours.
For “not-on-us” transactions, involving other banks’ ATMs, refunds must be processed within 48 hours.
“Customers must not be made to suffer for failed transactions caused by system errors or network failures,” the circular stated.
In a major shift, the CBN also mandated banks and ATM acquirers to deploy automated technologies that reverse failed or partial transactions without requiring customers to lodge complaints.
Institutions holding customer funds from failed disbursements are to reconcile and return balances immediately.
According to the CBN, these measures address widespread frustrations over delayed refunds and poor customer service, forming part of a broader effort to strengthen consumer protection, improve system reliability, and modernise Nigeria’s payments infrastructure in line with global best practices.
The guidelines will also overhaul ATM operations nationwide. Banks and card issuers must deploy at least one ATM for every 5,000 active cards, with phased compliance targets—30% by 2026, 60% by 2027, and full compliance by 2028. Any new ATM installation, relocation, or decommissioning will require prior CBN approval.
To enhance safety and accessibility, ATMs must be equipped with anti-skimming devices, CCTV cameras, and installed in secure, well-lit locations. Machines must comply with Payment Card Industry Data Security Standards (PCI DSS), maintain audit logs, and display helpdesk contacts. Additionally, at least 2% of ATMs must have tactile features for visually impaired users.
Other key provisions include:
ATMs must dispense cash before returning cards.
PIN changes should be free.
Receipts must be issued for all transactions except balance inquiries.
Transaction fees should be clearly displayed.
Only clean banknotes may be dispensed.
Machines must have backup power to minimise downtime.
Downtime must not exceed 72 consecutive hours, and operators must inform the public of the cause and restoration time if outages occur.
The CBN said it will enforce compliance through regular audits, on-site inspections, and monthly reports from ATM operators detailing deployments and locations. Defaulting institutions risk sanctions, though fines were not specified.
The apex bank explained that the overhaul was necessary to tackle the rising volume of complaints about failed transactions, cyber fraud, and declining service quality, adding that “the goal is to build a payments system that works seamlessly for everyone, urban and rural users alike.”
With over 200 million cardholders and growing reliance on digital banking, Nigeria’s payment ecosystem has expanded rapidly—but network failures, poor infrastructure, and slow reversals have continued to erode public trust.
The new guidelines, coming just eight months after the revision of ATM fees, are expected to improve service delivery, enhance transaction security, and hold banks accountable. Stakeholders have been invited to submit comments ahead of the final policy adoption, which could take effect before the end of the year.