In a recent announcement, the Central Bank of Nigeria (CBN) has unveiled a revised framework for Automated Teller Machine (ATM) withdrawal charges, set to take effect from March 1, 2025. This update is significant for millions of Nigerians who rely on ATMs for cash withdrawals, as it introduces new fees and alters existing ones. The changes are aimed at addressing rising operational costs and improving the efficiency of banking services in the country.
Overview of the New Charges
The CBN’s new policy outlines several key changes to ATM withdrawal fees, particularly affecting transactions conducted at ATMs of banks other than the one that issued the customer’s card. Here’s a breakdown of the new fee structure:
- Free Withdrawals from Own Bank ATMs: Customers will continue to enjoy free withdrawals when using ATMs operated by their own banks, commonly referred to as “On-Us” transactions. This means that if you withdraw cash from your bank’s ATM, you will not incur any additional charges.
- Charges for “Not-On-Us” Transactions:
- On-Site ATMs: For withdrawals made at ATMs located within a bank’s premises but operated by a different bank, customers will incur a fee of N100 for every N20,000 withdrawn. This fee applies to transactions conducted at ATMs that are directly affiliated with a bank branch.
- Off-Site ATMs: Withdrawals from ATMs situated outside bank premises, such as those found in shopping malls, airports, or fuel stations, will attract a base charge of N100 per N20,000 withdrawal. Additionally, these transactions may incur a surcharge of up to N500, bringing the total cost for withdrawing N20,000 from an off-site ATM to as much as N600.
- Charges for Withdrawals Below N20,000: Customers withdrawing less than N20,000 from another bank’s ATM will still be charged a fee of N100 per transaction. This measure is designed to discourage customers from splitting their withdrawals into smaller amounts to evade fees.
- International ATM Withdrawals: For international transactions, whether conducted via debit or credit cards, customers will be charged the exact amount imposed by the international acquirer handling the transaction. This approach reflects a cost recovery model, meaning customers will bear the actual fees incurred by the bank.
Rationale Behind the Changes
The CBN has stated that these changes are necessary to enhance the efficiency of ATM services and to ensure that appropriate charges are applied by financial institutions. The upward review of fees is attributed to rising operational costs faced by banks in Nigeria. By implementing these new charges, the CBN aims to encourage banks to improve their ATM services and expand their networks across the country.
Impact on Consumers
The revised ATM withdrawal charges are expected to have a significant impact on consumers, particularly those who frequently use ATMs of banks other than their own. The elimination of the three free monthly withdrawals previously allowed for interbank transactions means that customers will now incur charges for every withdrawal made at another bank’s ATM. This change could lead to increased costs for individuals who rely on cash withdrawals from multiple banks.
Recommendations for Consumers
In light of these changes, the CBN has provided several recommendations for consumers to minimize transaction fees:
- Prioritize Own Bank ATMs: Customers are encouraged to use ATMs operated by their own banks to avoid additional charges. This practice will help individuals save on withdrawal fees and make the most of their banking services.
- Explore Alternative Payment Methods: The CBN suggests that Nigerians consider alternative payment methods, such as mobile banking applications, point-of-sale (POS) transactions, and electronic transfers. These options can reduce reliance on cash withdrawals and help consumers avoid the new ATM fees altogether.
- Stay Informed: Customers should remain informed about the changes and adjust their banking habits accordingly. Understanding the new fee structure will enable individuals to make more cost-effective decisions regarding their cash withdrawals.
Conclusion
As the CBN prepares to implement these new ATM withdrawal charges on March 1, 2025, it is crucial for consumers to understand the implications of these changes. By prioritizing their own bank’s ATMs and exploring alternative payment methods, Nigerians can navigate the new fee structure effectively. The CBN’s decision to revise ATM charges reflects the ongoing challenges faced by the banking sector in Nigeria and aims to foster a more efficient and sustainable banking environment.
As the date approaches, customers are encouraged to stay vigilant and adapt their banking practices to mitigate potential costs associated with the new ATM withdrawal charges.
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