Unexpected ATM Charges: What the CBN's Latest Move Means for You

Due to the Central Bank of Nigeria's (CBN) new ATM fees for both "on-site" and "off-site" withdrawals, Nigerians will now have to pay higher fees for cash withdrawals.

Off-site ATM withdrawals are done at shopping malls, airports, or independent cash stations, whereas on-site ATM withdrawals are made at a bank's machine that is located outside of its branch location.

Acting Director of the Financial Policy and Regulation Department John Onojah announced the updated fees in a circular on Monday, and they will go into effect on March 1.

The change is the regulator's most recent attempt to strike a balance between the requirement for financial sector efficiency and growing operating costs.

The Central Bank of Nigeria (CBN) has examined the ATM transaction fees outlined in Section 10.7 of the current CBN Guide to Charges by Banks, Other Financial and Non-Bank Financial Institutions, 2020 (the Guide) in response to growing expenses and the need to increase the effectiveness of ATM services in the banking sector.

"It is anticipated that this review will expedite the rollout of automated teller machines and guarantee that financial institutions impose reasonable fees on service users." As a result, it was recommended that banks and other financial institutions implement the following fees starting on March 1, 2025.

According to the revised structure, there will now be a fee of N100 for every N20,000 taken out from an ATM that is owned by a bank but located outside of its branch locations.

Withdrawals made from off-site ATMs, such as those in malls, airports, or independent cash points, will be subject to a N100 fee plus a N500 surcharge for every N20,000 taken out, for a maximum potential charge of N600.

Withdrawals from ATMs operated by the account holder's own bank are still free.

Banks will use a cost-recovery mechanism for overseas ATM transactions, charging customers the precise fees levied by the foreign acquirer.

Additionally, it stated that the three free monthly withdrawals that were previously permitted for Remote-On-Us (clients of other banks or Not-On-Us) in Nigeria under Section 10.6.2 of the Guide would no longer be available.

The action was taken as Nigerian banks struggle with growing operational costs, such as security and infrastructure upkeep.

Increased withdrawal fees may deter people from using ATMs and make them more dependent on cash transactions, especially in rural and semi-urban areas where the use of digital payments is still relatively low.