Customers of Access Bank, GTB, Others Paid N119bn as Service Charges for e-banking Transactions

• Eight Nigerian banks experienced a combined surge in e-banking charges, with customers paying a huge amount for transactions
• In Q1 2024, the combined net fees and commission income for these banks totalled N341.71 billion
• Data also showed an 8.3% increase in the volume of electronic payment transactions, reaching 2.98 billion in Q1 2024

Legit.ng journalist Victor Enengedi has over a decade's experience covering Energy, MSMEs, Technology and the stock market.

In the first quarter of 2024 (Q1 2024), customers of eight commercial banks incurred service fees amounting to N119.3 billion for electronic business (e-biz) transactions.

This marks a 65% increase compared to the N72.22 billion paid by customers in the first quarter of 2023 (Q1 2023).

Legit.ng had earlier listed some of the levies Nigerians pay to banks and the federal government for electronic transactions.

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Electronic banking fees surge

The eight banks involved are Guaranty Trust Bank (GTB), with N11.26 billion; Zenith Bank, with N19.9 billion; Access Bank, with N33.28 billion; and Fidelity Bank, with N1.31 billion.

Others are Stanbic IBTC with N1.07 billion, United Bank for Africa (UBA) with N44.35 billion, FCMB Group with N5.08 billion, and Wema Bank with N3.01 billion.

The banks' financial statements for Q1 2024 revealed that customer account maintenance fees increased by 18.6% year-on-year, rising to N60.6 billion from N51.09 billion in Q1 2023.

Four Nigerian banks were recently listed among the best in Africa, according to the 2024 World's Best Banks survey.

Banks' maintenance fees increased

Zenith Bank received the highest account maintenance fees at N16.89 billion, followed by Access Bank with N13.8 billion, and Guaranty Trust Bank (GTB) with N9.4 billion.

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Other banks include UBA with N9.34 billion, Fidelity Bank with N4.94 billion, FCMB Group with N2.73 billion, Stanbic IBTC with N1.5 billion, and Wema Bank with N1.46 billion.

Additional data provided by Vanguard revealed that the combined net fees and commission income for the eight banks reached N341.71 billion in Q1 2024, marking an 81.6% year-on-year increase from N188.14 billion in the same period of 2023.

The Nigerian Interbank Settlement System (NIBSS) reported that the value of electronic payment transactions in Q1 2024 grew by 89% year-on-year, rising to N257.73 trillion from N136.2 trillion in Q1 2023.

Similarly, the volume of electronic payment transactions increased by 8.3% year-on-year, reaching 2.98 billion in Q1 2024 compared to 2.75 billion in Q1 2023.

Susan Uwa, a financial consultant, told Legit.ng that Nigerian banks are increasingly capitalizing on the surge in e-banking transactions to boost their revenue.

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She said:

"With the proliferation of mobile banking apps and internet banking services, banks are collecting substantial fees from electronic fund transfers, bill payments, and ATM withdrawals. The convenience of these digital services has led to widespread adoption among consumers, driving up transaction volumes.

"Additionally, banks benefit from reduced operational costs associated with fewer in-branch transactions. This shift not only enhances customer satisfaction through improved accessibility but also strengthens the banks' financial performance, making e-banking a vital component of their growth strategy in Nigeria's evolving financial landscape."

FG directs banks to deduct stamp duty

In related news, Legit.ng earlier reported that the Nigerian government directed commercial banks to immediately deduct a 0.375% stamp duty charge on all mortgage-backed loans and bonds.

Mortgaged-backed loans are facilities given by financial institutions to individuals who are entitled to acquire a home and repay them over time with interest.

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The commercial banks sent messages to customers informing them of the new directive, saying that the Federal Inland Revenue Service will make the deduction.

Source: Legit.ng