One Week to Christmas, Nigerians Struggle with Cash Scarcity, Empty ATMs and High PoS Fees
Legit.ng journalist Victor Enengedi has over a decade's experience covering Energy, MSMEs, Technology and the Stock Market.
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With just a few weeks to Christmas, many Nigerians are expressing frustration over the scarcity of cash at banks and ATMs nationwide.
This situation is compounded by the declining quality of banking services in recent months, despite efforts by several banks to enhance their digital infrastructure to improve customer experience.
Source: UGC
These mounting issues arise less than 15 days before Christmas, coinciding with the Central Bank of Nigeria's (CBN) recent warning to penalise banks that have not upgraded their systems to meet the increasing demands of online banking customers.
The CBN also released dedicated phone numbers and email addresses for the public to report issues related to accessing cash through banks and ATMs.
Importance of cash during Yuletide
The Yuletide season in Nigeria is a time of celebration, marked by festive gatherings, gift-giving, and increased spending.
Cash plays a pivotal role during this period, enabling seamless transactions in markets, transport hubs, and local businesses that may not have access to digital payment systems.
For many, especially in rural areas, cash remains the most reliable and accessible medium of exchange.
However, the ongoing cash scarcity in Nigeria poses significant challenges.
Limited access to physical currency disrupts traditional holiday activities, dampens the festive spirit, and impacts small-scale traders who rely heavily on cash for their livelihoods.
PoS agents to the rescue, hike charges
Point of Sale (PoS) agents have emerged as a crucial source of cash for Nigerians grappling with ongoing naira scarcity.
As banks struggle to meet customers' cash demands, long queues and cash withdrawal limits have pushed many to rely on PoS operators for their daily financial transactions.
These agents, often stationed in accessible neighbourhood spots, offer quick and convenient cash withdrawals, albeit at higher charges due to increased demand and limited cash availability.
Chidi Nwoke, a customer of one of the tier-1 banks in Lagos, told Legit.ng of the challenges he has faced getting cash.
He said:
"It’s frustrating to visit multiple ATMs only to find them empty. Banks aren't helping either; they keep saying no cash is available. I’ve had to rely on PoS operators, and they’re charging ridiculous amounts just to withdraw my money. This isn't fair to us at all!"
Another customer, Adenike Olawale, laments that the charges by the PoS operators have increased amid the scarcity of cash;
She said:
"The cash scarcity is becoming unbearable! I’ve wasted so much time and energy looking for ATMs with cash. Now, I’m forced to use PoS operators who charge double what they used to. Why should we suffer so much to access our own money?"
Several factors have disrupted PoS operators' business operations, compelling them to increase withdrawal charges.
One major challenge is the limited availability of cash both over the counter and at ATMs, prompting PoS operators to source cash from market vendors and gas station employees to sustain their businesses.
Reports indicate that PoS operators pay between N1,000 and N2,000 to obtain N100,000 to N200,000 in cash, leading to a 100% hike in consumer fees.
As a result, operators now charge N200 for withdrawing N5,000, doubling the previous fee of N100.
They also attribute the rise in their charges to the recently introduced Electronic Money Transfer Levy (EMTL) implemented by the Nigerian government on fintech platforms.
For many, the cost is a small price to pay for bypassing the chaos of banks and cash unavailabilioty of funds at ATMs.
What banks are doing about cash scarcity
Persistent cash scarcity has compelled banks to ration cash at ATMs and over the counter while also adjusting withdrawal limits.
Banks in Nigeria are grappling with ongoing cash scarcity by adopting innovative measures to ensure customer access to funds and maintain operational efficiency.
Many banks have intensified efforts to promote digital banking, encouraging customers to use mobile apps, USSD platforms, and online transaction transfers.
To ease cash flow issues, banks optimise ATM operations, increase withdrawal limits, and replenish cash supplies more frequently. Some have introduced dedicated support lines for resolving transaction issues.
Despite these efforts, long queues and frustrated customers persist, highlighting the challenges banks face in managing liquidity and sustaining public confidence during this period of scarcity.
Addressing cash scarcity
The current situation highlights the need for improved financial infrastructure and policies to ensure cash availability during critical periods.
A balanced approach that promotes digital payment adoption while ensuring adequate cash supply is essential.
As Nigerians prepare for the festivities, addressing the scarcity will help preserve the joy and economic vibrancy of the season.
CBN confirms validity of old, new naira notes
In related news, Legit.ng reported that the CBN has dismissed reports claiming that the old series of N200, N500, and N1,000 banknotes will no longer be accepted as legal tender by December 31, 2024.
The apex bank stated that such claims are false and calculated to disrupt the country’s payment system.
The bank directed all banks to continue to issue and accept all denominations of Nigerian banknotes, whether old or re-designed.
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Source: Legit.ng
