Nigerians Grapple With High PoS Charges As ATMs Remain Empty Despite CBN Threats

Nigerians are grappling with high PoS charges as ATMs remain empty despite CBN threats to sanction banks.

NaijaOnPoint Nigeria reports that a few hours to the end of 2024, many Nigerians are now at the mercy of Point of Sales (PoS) operators as most banks’ Automated Teller Machines (ATMs) across Lagos metropolis remain empty.

Inside the banks, there is no reprieve as most of the banks turn their customers back for lack of cash, and in rare cases where the customers are able to get cash, they are limited to N10,000 or N20,00 withdrawals.

This is happening despite a recent warning to the banks by the Central Bank of Nigeria (CBN) that any bank found not dispensing cash via ATMS would be sanctioned.

“It’s been frustrating. I’ve gone to three different banks today, and none of them has cash to give. How are we supposed to celebrate the season like this,” lamented Bright Joseph, a Lagos resident. 

PoS Operators raise charges 

The situation has left many Nigerians who need cash for the end of the year purchases at the mercy of PoS operators, who are now taking advantage of the scarcity to impose exorbitant charges on cash withdrawals.

• In some parts of Lagos, a typical PoS transaction now attracts fees as high as N500 for a withdrawal of N5,000—a sharp contrast to the N100 or N200 that was the norm a few months ago.  

• For larger amounts, the charges are even steeper, leaving customers with no choice but to pay the inflated rates. 

“I had to withdraw N10,000 yesterday, and the PoS operator charged me N1,000. It’s unfair, but what can I do? I needed the cash,” said Mr. Benjamin Idowu, a civil servant residing in the Ogba area of Lagos.  

For many Nigerians, who rely on cash for daily transactions like transportation, feeding, and small purchases, the situation has been particularly dire.

What’s causing the scarcity? 

While no official explanation has been given for the shortage, stakeholders speculate that it could be linked to a combination of factors, including cash hoarding by individuals preparing for festive spending, or a deliberate plan by the CBN to force many Nigerians to embrace digital payment in order to make more transactions traceable and taxable.

• An official in one of the tier-2 banks, who spoke with Naijaonpoint under the condition of anonymity because he was not authorized to speak, blamed the cash scarcity on the CBN.
• According to him, the CBN has not been releasing cash to banks like before and the amount of cash that customers are depositing has significantly reduced.

“In a situation where you are not getting enough cash from the CBN and customers are not bringing cash to deposit, how do we get cash to pay our customers? Banks don’t print money,” he said. 

Suggesting that it might also be part of the plans of the CBN to limit cash in circulation he queried, “Why has the CBN not penalized any bank for not dispensing cash as of now?”

How PoS operators get cash 

While fingers are being pointed at an alleged unholy alliance between PoS operators and banks as the cause of the scarcity, some of the operators have debunked the insinuation saying there was no such deal.

According to Mr. Olawale Michael, who has a chain of PoS shops in Ikeja, the operators have also been unable to withdraw cash from the banks in recent times.

“There is no truth in the allegations that PoS operators are colluding with banks to cause cash scarcity. In fact, in the last two months, I have not withdrawn from the bank and my businesses are providing cash for people every day.” 

Asked how he gets cash, he said: “For some time now, we have been working with market women and shop owners, who receive cash daily from their sales, we collect cash from them and transfer the money to their account.” 

“It is a symbiotic relationship because we are also saving them the stress of going to the bank to go and deposit cash,” he added. 

Another PoS operator, Mrs Nkechi, said she has not been getting cash from bank but from a fueling stating nearby, adding that she pays extra to the attendant on top of every cash collected.

“People are complaining that PoS operators are increasing their charges, we are also paying to get the cash. If I’m able to withdraw from the bank, then the charges will be normal, but in the absence of that I have to source for the cash elsewhere and I also pay to get it,” she said. 

What you should know 

In September this year, the CBN announced that it would sanction banks failing to dispense cash through their ATMs, as part of efforts to ensure sufficient cash in circulation.

• CBN Governor, Yemi Cardoso, said this during a press briefing at the end of the 297th Monetary Policy Committee (MPC) meeting in Abuja on Tuesday.
• The governor emphasized that all deposit money banks must ensure there is always enough cash available for withdrawals.
• The CBN governor said that the apex bank has set up a monitoring system to ensure compliance, and any bank not adhering to this directive will face penalties.
• Cardoso reiterated that the CBN’s monitoring and spot-checking system would keep track of banks’ compliance, and those failing to meet the requirement would be sanctioned.
• However, as of the time of filing this report, there has not been any report of any bank sanctioned for not dispensing cash via ATMs, even as the machines remain visibly empty across banks.

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