Has Nigeria Become a POS-Driven Economy?

In recent years, Nigerians have found themselves relying more on Point of Sale (POS) agents instead of Automated Teller Machines (ATMs) to access cash. 

This shift has been driven by several factors, including government policies, banking limitations, and the need for convenience. Nigeria’s banking system has changed. While the CBN aims for a cashless society, most Nigerians still rely on cash for daily transactions. Since ATMs no longer meet their needs, POS agents have stepped in to fill the gap. Whether this trend will continue or change in the future remains to be seen.

How did we get here?

The Central Bank of Nigeria (CBN) has been pushing for a cashless economy. To achieve this, it has introduced policies such as withdrawal limits and extra charges on cash transactions. 

However, instead of going fully digital, Nigerians have turned to POS agents for quick and easy cash withdrawals.

ATMs no longer serve the people

ATMs were once the go-to option for withdrawing cash at any time of the day. But things have changed. Many ATMs no longer have cash, and even when they do, long queues and withdrawal limits make them frustrating to use. Reports suggest that most bank ATMs remain empty for long periods, forcing people to look for alternatives.

One of the biggest reasons for this is cost. Maintaining ATMs requires security, power, and regular cash restocking. Some banks see this as an unnecessary expense, especially since POS agents can provide similar services without much effort from the banks.

The rise of POS agents

POS agents are everywhere. In most Nigerian cities, you don’t have to walk far before you find one. Unlike ATMs, they are always stocked with cash—though they charge a fee for withdrawals. These agents have become the backbone of cash transactions, especially in areas where banks and ATMs are scarce.

As of 2024, POS transactions in Nigeria have grown significantly. More money is being withdrawn through POS agents than from ATMs. Reports show that in just six months, Nigerians transacted over N85 trillion using POS, while ATM withdrawals were much lower.

Security Concerns Around ATMs

Another reason why ATMs are no longer popular is security. During the cash crunch in 2023, many bank ATMs were vandalized. Criminals also began targeting ATM users, making people feel unsafe withdrawing large sums of money from bank machines. POS agents, on the other hand, are scattered in different locations and offer a safer alternative.

Will ATMs Make a Comeback?

The CBN is trying to revive ATM usage by introducing measures to keep them stocked. It has also released phone numbers for customers to report banks that fail to maintain cash in their ATMs. Additionally, some banks are exploring deposit-taking ATMs, which can recycle cash deposits to reduce shortages.

However, with the ease of mobile banking, QR code payments, and the widespread availability of POS agents, ATMs may never return to their former glory. Nigerians prefer convenience, and for now, POS agents remain the most accessible way to get cash.