CBN's New ATM Charges: A Comprehensive Guide

The Central Bank of Nigeria (CBN) has made a significant change to its ATM transaction fees, effective March 1, 2025. This decision, outlined in a circular released on February 10, 2025, eliminates the previous policy of three free monthly withdrawals for customers using ATMs of other banks. This means that all off-network ATM transactions will now attract charges.

Understanding the New Charges

The updated policy affects Section 10.7 of the CBN Guide to Charges by Banks, Other Financial and Non-Bank Financial Institutions (2020). The key changes include:

• On-Us Transactions: Withdrawals from your own bank's ATM remain free.
• On-Site, Off-Network Transactions: A charge of N100 per N20,000 withdrawal will apply for using another bank’s ATM located within their premises.
• Off-Site, Off-Network Transactions: Withdrawals from ATMs outside bank premises will incur a N100 charge per N20,000, plus an additional surcharge of up to N500. This surcharge is the income of the ATM deployer or acquirer and must be clearly shown during the transaction.
• International Transactions: International ATM withdrawals will be charged at the exact rate set by the international acquirer. This ensures that cost recovery is aligned with global standards.

The elimination of three free monthly withdrawals for off-network transactions is a major shift in policy. The CBN's circular explicitly states that “the three free monthly withdrawals allowed for Remote-On-Us (other bank’s customers/Not-On-Us consumers) in Nigeria under Section 10.6.2 of the Guide shall no longer apply.” This means that customers who frequently use ATMs belonging to other banks should expect increased costs. This will likely impact budgeting and banking habits for many Nigerians.

Rationale Behind the Changes

The CBN attributes the revision to rising costs associated with maintaining ATM services. According to the circular, the changes are expected to accelerate the deployment of ATMs across the country and ensure that appropriate charges are applied by financial institutions. This suggests the CBN believes that fairer pricing will incentivize investment in ATM infrastructure, ultimately improving access to cash for customers.

The CBN's statement emphasized the need to “improve efficiency of Automated Teller Machine (ATM) services in the banking industry.” This efficiency drive suggests a focus on modernizing the country’s financial infrastructure, and it’s possible that the charges are also intended to steer users towards digital banking options. The introduction of significant surcharges on off-site ATMs, in particular, could prompt many to rely more heavily on mobile banking apps and online transfers. These digital channels offer a more cost-effective way to access funds.

The changes come after the CBN recently sanctioned nine banks with a total of N1.35 billion in fines for failing to maintain adequate cash availability at their ATMs during the festive season. Each bank received a N150 million fine, highlighting the CBN’s commitment to ensuring efficient ATM services. This enforcement action underscores the seriousness with which the CBN views the provision of reliable ATM access.

The Impact on Digital Banking

The new charges are expected to accelerate the shift towards cashless transactions, a key objective of the CBN's broader financial policy. By increasing the cost of ATM withdrawals, particularly for those using off-network ATMs, the CBN is implicitly encouraging the use of digital payment channels such as mobile banking and online transfers. This move aligns with global trends toward digital finance and reflects an ongoing push to reduce cash dependency in Nigeria’s financial ecosystem.

Adapting to the New Reality

With banks required to implement these new charges from March 1, 2025, customers need to adjust their banking habits accordingly. This includes exploring digital alternatives like mobile banking apps and online transfers to minimize added fees. Understanding the new fee structure and planning accordingly will ensure that customers continue to access their funds efficiently without incurring undue expenses. The implementation of this policy is expected to further push Nigeria towards a more digital-centric banking landscape.

A Look Ahead: The Future of ATM Services in Nigeria

The CBN’s action is a crucial step in the ongoing evolution of Nigeria’s banking sector. It is intended to improve efficiency, modernize financial processes, and encourage a shift towards cashless transactions. This proactive approach is expected to reshape how customers interact with ATM services and promote greater adoption of digital banking solutions. The long-term effects of these changes remain to be seen, but they undoubtedly signal a notable transition in how Nigerians access and manage their finances.

The CBN’s move is part of a broader strategic effort to drive the adoption of digital financial services across the country. By aligning with global trends and promoting financial inclusion, this action will help to establish a modern and efficient financial ecosystem for all Nigerians.

The introduction of these new charges will lead many consumers to reconsider their banking habits. Many will be forced to weigh the added costs of physical cash withdrawals against the convenience of digital banking. Ultimately, it appears the goal is to encourage the shift away from cash and accelerate the adoption of mobile and online banking services.