For years, Nigerian banks have charged customers for using ATMs outside their home bank’s network, sparking ongoing debates about the fairness of these fees.
But with the Central Bank of Nigeria (CBN) announcing in February 2025 that it would eliminate the three free monthly withdrawals at other banks’ ATMs, the issue has become even more contentious. Now, customers must pay N100 per N20,000 withdrawn at other banks’ ATMs, with additional charges of up to N500 for off-site ATM usage.
This policy shift raises an essential question: Should banks bear the cost instead of passing them onto customers? Given the substantial profits banks generate from other service fees, it is only fair to ask whether ATM withdrawals should be a free service rather than another avenue for banks to boost revenue.
Why Are Banks Still Charging ATM Fees?
Banking is an essential service, and ATMs provide critical access to cash. However, many customers now feel they are being unfairly taxed just to access their own money. Despite the convenience ATMs offer, these fees disproportionately affect everyday Nigerians who rely on cash transactions.
The argument that ATM operations are costly is valid—power supply, security, and cash management all require significant investment. Yet, the fees customers pay on other services should be enough to cover these costs without an additional burden.
Additionally, the rise of Point of Sale (POS) operators has added to the strain, as they frequently withdraw large amounts of cash, depleting ATMs quickly. While this is a challenge, banks must decide whether they exist primarily for profit or to provide a fair and accessible service to their customers.
Should ATM Fees Be a Standard Cost of Banking?
If banks insist on charging these fees, they must justify why ATM services are treated as a premium offering rather than a standard part of banking. After all, banks already profit from account maintenance fees, transfer charges, and loan interest rates. In other countries, banks absorb ATM fees as part of customer service, recognizing that financial inclusion and ease of access to cash benefit the economy.
The argument that banks need these fees to remain profitable falls flat when considering the billions of naira generated from various other charges. At a time when digital banking is growing, it seems counterproductive to discourage ATM use by imposing higher fees. Instead, banks should invest in making financial services more seamless and customer-friendly rather than exploiting every possible revenue stream.
Financial Inclusion or Corporate Greed?
The true cost of these fees extends beyond individual transactions. They create a barrier for the unbanked and underbanked, discouraging financial inclusion. If withdrawing cash comes at a high cost, many Nigerians will revert to informal savings and cash handling methods, which weakens the banking system’s role in economic growth.
Nigerian banks must rethink their approach. Instead of charging customers for ATM withdrawals, they should see ATM maintenance as an operational cost—one that fosters goodwill, builds customer loyalty, and enhances financial inclusion. After all, if banks truly prioritize customer convenience, then access to cash should not come at a premium.
As the debate continues, one thing is clear: financial institutions must decide whether their priority is sustainable customer relationships or short-term profit gains. Until then, Nigerian customers will keep asking—why are we still paying to access our own money?
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