Experts Warn Rising Bank Charges Could Reverse Nigeria’s Financial Inclusion Gains

Financial analysts are sounding the alarm over the increasing charges on financial transactions in Nigeria, cautioning that they could erode the progress made in financial inclusion.

From the Electronic Money Transfer Levy (EMTL) on digital payments to ATM withdrawal fees, Nigerians are now facing higher costs whether they transfer funds electronically or withdraw cash. Experts fear that these growing expenses may discourage bank usage and dissuade financially excluded individuals from joining the formal banking system.

Already, some small businesses that had previously embraced digital payments are beginning to opt out. A frozen food vendor in Lagos shared her experience, stating that she has stopped accepting transfers for purchases of ₦10,000 and above due to deductions by fintech platforms.

“I used to receive payments through my OPay account, but in December, they began deducting ₦50 on transactions of ₦10,000. I lost money, so now, if you want to pay via transfer, you must cover the extra charges, or you pay in cash,” she explained.

Beyond the newly introduced ₦100 ATM withdrawal fee, banks impose additional charges, including a monthly deduction of ₦50 to ₦100 for account maintenance. Interbank transfers attract fees ranging from ₦10 to ₦50, while SMS alerts cost customers ₦6 per message. USSD banking services come with a ₦6.95 charge, and digital transactions exceeding ₦10,000 incur a ₦50 deduction. Meanwhile, replacing a lost ATM card can cost between ₦1,000 and ₦2,000.

David Adonri, Managing Director of Highcap Securities, warned that these mounting fees could undermine Nigeria’s cashless policy. He noted that small business owners and traders might become reluctant to deposit their earnings in banks, knowing they would incur additional charges when withdrawing the funds.

“These excessive fees imposed on customers for accessing their own money serve as a deterrent to keeping funds in the bank,” Adonri said.

Financial expert Adewale Adeoye also criticized the rising costs, arguing that they primarily benefit banks while financially burdening customers.

“These charges will make banks richer but will only impoverish Nigerians,” he stated. “Some individuals may even avoid opening bank accounts altogether just to escape the multiple fees, which could erode trust in the financial sector and weaken the nation’s savings culture.”

Point-of-Sale (PoS) operators are also considering increasing their service fees in response to the revised ATM withdrawal charges.

David Abiodun, Chairman of the Lagos Chapter of the Association of Mobile Money & Bank Agents of Nigeria (AMBANN), pointed out that PoS agents now have to cover expenses previously handled by service providers, including SIM card costs and data subscriptions.

“The new ATM withdrawal fees will naturally lead to increased PoS charges. Customers may start preferring ATMs over PoS terminals, making our business less profitable,” he explained.

Abiodun added that the association was reviewing the new ATM fees, as the Central Bank of Nigeria (CBN) introduced them without consulting key stakeholders.

On February 10, 2025, the CBN announced revised ATM withdrawal charges, set to take effect from March 1. A circular signed by Acting Director of Financial Policy and Regulation, John Onojah, detailed the changes, which the apex bank justified as necessary due to rising operational expenses.

Under the new policy, withdrawals from a customer’s own bank ATM remain free. However, those using another bank’s ATM at a bank branch will be charged ₦100 per ₦20,000 withdrawal. For off-site ATMs, an additional surcharge of up to ₦500 may apply.

Meanwhile, fintech platforms such as PalmPay, OPay, and Moniepoint began deducting EMTL from customer transactions on December 1, 2024, as part of the government’s revenue-generation efforts. Previously, many fintech users enjoyed free transactions, but the new levy has effectively put an end to that benefit.

Financial analysts warn that these escalating costs could discourage digital payments and push more Nigerians toward cash-based transactions, threatening the country’s long-term financial inclusion strategy.