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As Nigeria grapples with persistent cash scarcity, Point-of-Sale (PoS) operators have significantly increased transaction charges, blaming the hike on restricted access to cash due to bank rationing. With the festive season approaching, concerns are mounting over potential exacerbation of the situation unless the Central Bank of Nigeria (CBN) intervenes urgently.
Rising Charges Amid Cash Crunch
In major cities such as Abuja and Lagos, PoS operators now charge considerably higher fees for cash withdrawals. In some instances, charges have more than doubled. For example, withdrawals of ₦5,000 now attract fees as high as ₦300 in certain areas, compared to ₦100 in less-affected regions.
Typically, operators charge ₦100 for withdrawals between ₦1,000 and ₦5,000, and ₦200 for amounts above ₦5,000 and below ₦10,000. However, scarcity of cash has driven some operators to impose rates as high as ₦100 for amounts as low as ₦2,000 and ₦300 for withdrawals exceeding ₦5,000.
Bank customers, like Mrs. Salako from Lagos, have expressed frustration over the situation. “The charges are outrageous, but we have no choice because banks rarely dispense cash, and even inside the banking halls, withdrawals are capped at ₦5,000,” she lamented.
Banks, PoS Operators, and the Cash Cycle
Despite a recent CBN directive mandating banks to prioritize cash disbursement through Automated Teller Machines (ATMs), complaints of dry ATMs persist. Investigations reveal that some PoS operators exploit the system by using multiple bank cards to drain ATMs of cash.
At Obafemi Awolowo Road in Ikeja, Lagos, a customer recounted how three PoS operators withdrew significant amounts before she could access the ATM. One operator reportedly made ten withdrawals of ₦200,000 each using different ATM cards, leaving the machine empty. These operators then sell the cash to bank customers unable to access funds, further driving up withdrawal charges.
Additionally, some operators collaborate with traders, encouraging cash payments or transfers to PoS terminals, where customers are charged fees for processing transactions.
CBN’s Response to the Crisis
The Central Bank of Nigeria has intensified efforts to ensure efficient cash distribution and prevent abuse. In a recent circular signed by Solaja Olayemi, Acting Director of Currency Operations, the CBN announced “spot checks and mystery shopping” to monitor banks’ cash disbursement practices.
The CBN warned that banks found distributing cash to naira hawkers or engaging in cash hoarding would face severe penalties. For instance:
- Banks linked to seized cash from hawkers will be fined 10% of the value of the withdrawn cash, with subsequent offences incurring additional penalties.
- Violations of the Clean Note Policy or actions hindering responsible cash disbursement will attract further sanctions.
As the yuletide season approaches, the CBN has called on Deposit Money Banks (DMBs) to prioritize ATM cash disbursement and enhance internal controls to ensure fair and accountable cash distribution.
Looking Ahead
The cash scarcity crisis has turned Nigeria’s PoS network into a crucial but contentious element of the financial ecosystem. With over 3.73 million registered PoS terminals nationwide, these outlets, originally designed to promote cashless transactions, have morphed into micro-banking hubs.
The CBN, in collaboration with law enforcement, has pledged to intensify surveillance and enforce compliance to prevent further escalation of the cash crisis during the festive period. Nigerians await the effectiveness of these measures in restoring balance and ensuring equitable cash access across the country.
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