From ATMs to POS: The Decline of Cash Access and the Rise of Exploitative Charges in Nigeria

A friend went to the ATM to withdraw cash yesterday only to be confronted with the message “Machine is temporarily out of service” or “Machine is temporarily unable to dispense cash.” For hours, all those who queued for money couldn’t access their funds. One after the other, they either left or stormed the banking hall.

My friend entered the banking hall, filled out a form, and tossed it to the teller.

His shock turned into fury when he was told that he could only be paid N5,000. He stormed out in anger. The second bank was no different, offering only N10,000. But across the road, he found a solution -20,000 without delay from a POS operator, albeit with a charge of N800.

An automated teller machine (ATM) is made to perform the typical function of banks by collecting, transferring, and dispensing cash. But just before our eyes, Nigerians have fallen for the trick of banks and bankers, who have made ATMs almost inoperative. Banks dispense the highest dispensing of either N5,000 or N10,000 in many outlets, while POS operators can dispense hundreds of thousands daily.

While I appreciate the jobs the Point-of-Sale Machine (POS) provides, it’s clear that we need to use this technology correctly. Instead of tracking sales and receiving electronic transfer payments, it’s being used to exploit customers. This misuse has led to the gradual decline of automated teller machines (ATMs).

Gradually, banks have replaced ATMs with point-of-sale machines that charge exorbitant rates compared to the patronage they would have attracted. It’s alarming that, due to our passive acceptance, we are allowing a monopoly of the POS to develop. If we’re not careful, this could soon lead to the phase-out of ATMs. We may also face a situation where banks will no longer dispense cash. This could lead to a financial system where access to money is limited and controlled by a few, all for the selfish gains of POS investors. In Ghana, one can withdraw an average of $1,000 of Cedis equivalent daily. Customers do not need to queue in the banking halls in that space.

It is absurd to see customers suffer daily queuing for money that may never come through the ATM channels for various reasons, which is conspiratorial against customers. But with a snap of the finger, have cash dispensed through the POS machines.

While I appreciate the employment opportunities the POS is generating, it’s clear that we need a more balanced and cost-efficient financial system for all Nigerians. This is not just a dream; it’s an achievable reality with the right strategies. Let’s work towards it.

Grace and peace!!!