Entrepreneur Explains How CBN’s New ATM Charges Exploit Low-income Nigerians

• A fintech entrepreneur and business executive has urged the CBN to review the recent hike in ATM charges
• The business executive referenced a recent street survey he carried out and listed the long-term effects of the new policy
• The CBN's reviewed ATM charges will take effect on March 1, 2025, with customers paying up to N500 charges on a withdrawal

Legit.ng journalist Ruth Okwumbu-Imafidon has over a decade of experience in business reporting across digital and mainstream media.

Tope Dare, a fintech entrepreneur and business executive, has warned that the newly revised Automated Teller Machine (ATM) charges are anti-low-income Nigerians.

Dare noted that the policy would have the worst effect on low-income Nigerians who only make small withdrawals for daily living expenses.

The Central Bank of Nigeria (CBN) recently revised the ATM withdrawal fees with several changes to existing policies.

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The revision eliminated the three free withdrawals every month, meaning that customers will pay charges on every withdrawal.

The reviewed fees imposed up to N500 fees on a single N20,000 withdrawal from an off-site ATM (located in a public place like a market, fuel station or mall).

Low-income Nigerians to be affected

Analysing further, Dare noted that while individuals capable of withdrawing large sums at once might not feel the impact, those who make frequent withdrawals in smaller amounts would bear the brunt of the policy, as they would accumulate multiple charges.

He noted that a lot of Nigerians are likely to make multiple N5,000 or N10,000 withdrawals over the week and would thus end up with multiple unfair charges, the PUNCH reports.

Recall that the Socio-Economic Rights and Accountability Project (SERAP) initiated legal action against the CBN to stop it from implementing what they called "an unfair, unreasonable, and unjust policy".

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Mr. Dare narrated findings from a recent survey that showed heightened public frustration and confusion over the policies.

He warned that for a nation still trying to drive financial inclusion, CBN’s complex banking policy may confuse the population and drive them back to their informal banking systems in the long term.

His words;

“The CBN should focus on making banking more accessible, not discouraging small transactions. If this policy must stand, there should be exemptions or lower fees for small withdrawals to protect vulnerable Nigerians.”

Recall that the CBN said this review was necessitated by rising operations costs and the need to incentivise banks to keep their ATM points functional and active.

The CBN also listed ways that customers can avoid incurring multiple charges.

CBN ends three free monthly withdrawals

Earlier, Legit.ng reported efforts to implement a cashless policy in Nigeria by the CBN as it announced an end to the three free withdrawals a month policy.

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Customers could end up paying charges as high as N500 for N20,000 cash withdrawals from another bank's ATM.

The apex bank, however, left withdrawals from its own bank ATMs free of charge for customers.

Proofreading by James, Ojo Adakole, journalist and copy editor at Legit.ng.

Source: Legit.ng