Renowned economist Dr. Augustine Kutu has called on the Central Bank of Nigeria (CBN) and policymakers to address the growing concerns of Nigerians regarding the newly introduced charges on Automated Teller Machine (ATM) transactions.
Under the revised fee structure, which took effect on March 1, 2025, commercial banks are now imposing a N100 charge on every N20,000 withdrawal made at on-site ATMs and a N600 fee for off-site ATM withdrawals.
This development follows a circular issued by the CBN on February 10, 2025, announcing the review of ATM transaction fees across the banking sector.
According to the new guidelines, withdrawals from a customer’s own bank ATMs remain free of charge.
However, transactions conducted at another bank’s ATM for amounts up to N20,000 will now attract a N100 charge per withdrawal.
Dr. Kutu, an Assistant Professor at the University of Western Ontario, Canada, emphasized that the policy has sparked widespread concern among Nigerians, who believe it will reduce their purchasing power, increase financial burdens, and discourage savings.
“As part of the monetary policy framework, the CBN regulates bank charges and deductions, including those related to cash transactions and account maintenance. These charges vary across banks and depend on the specific type of transaction,” Dr. Kutu stated.
The economist noted that the reintroduction of fees on certain cash deposits and withdrawals is intended to promote a modern, efficient, and cashless payment system.
According to the CBN, excessive reliance on cash transactions can be costly and hinder economic development.
Dr. Kutu acknowledged the potential benefits of reducing excessive cash handling, minimizing operational costs, and encouraging Nigerians to adopt alternative digital payment methods.
However, he warned that several critical challenges could hinder the policy’s effectiveness.
“Among these challenges are security concerns, as electronic payment systems are vulnerable to cyber threats and data breaches.
Additionally, unreliable infrastructure, including limited access to the internet and electricity, continues to obstruct the widespread adoption of digital payment methods,” he explained.
Another major concern is the low level of digital literacy, particularly in rural areas, which makes it difficult for many Nigerians to transition to electronic payment systems.
Furthermore, the recent approval of a 50 per cent hike in telecom tariffs could further discourage the adoption of cashless transactions.
“To ensure successful implementation, policymakers must first tackle pressing customer concerns, including the steady rise in telecom tariffs, cybercrime fears, and technical issues associated with electronic banking,” Dr. Kutu stressed.