As Nigeria gradually shifts away from a cash-dependent economy toward virtual payments for goods and services, the transition is coming with a hefty price tag. In 2023, the Central Bank of Nigeria (CBN) introduced a series of policies to stabilize the economy and strengthen the naira. However, the move has come under scrutiny, with many experts and Nigerians questioning the feasibility of these changes, particularly the burden of bank charges.
Despite the CBN’s push to encourage cashless transactions, Nigerians still heavily rely on cash, especially for transportation and trade. With banks’ ATMs unable to meet demand, Point-of-Sale (PoS) merchants have become the go-to option for accessing physical naira. However, the cost of using these PoS terminals has added a significant financial strain on everyday Nigerians.
As of February 2024, there were 26.54 million registered PoS terminals in Nigeria, a notable increase from the 21.65 million in July 2023, according to the Nigeria Inter-Bank Settlement System Plc (NIBSS). These terminals charge a minimum of N100 for every withdrawal under N5,000, regardless of the amount. For example, if a Nigerian withdraws N500, they still pay the same N100 fee as they would for a N5,000 withdrawal.
Given that all registered PoS terminals complete at least one under-N5,000 transaction daily, Nigerians are paying a minimum of N2.654 billion each day just to access their cash through PoS merchants. This is a cost that would otherwise be waived by banks if customers used ATMs or other withdrawal methods.
While the CBN argues that these measures are designed to discourage cash withdrawals, the country’s poor telecommunication infrastructure and frequent network failures make the shift to a cashless economy difficult. In many rural areas, network coverage is sparse or nonexistent, forcing residents to travel long distances to withdraw cash and pay a fee for the service.
In urban areas like Ikeja, Lagos, PoS merchants have capitalized on this need for cash. FIJ spoke to several merchants operating near bank ATMs, with many customers choosing to pay PoS fees rather than wait for the often malfunctioning bank machines. Some merchants, like Afolabi Kolawole, make between N3,500 and N7,000 daily, depending on the volume of customers. These businesses charge fees ranging from N100 to N300 depending on the transaction amount.
The fees paid to PoS merchants are not just a minor inconvenience — they represent a significant additional cost to Nigerians. For instance, withdrawing N5,000 could cost an individual an additional N100, equating to N0.02 for every N1 withdrawn. If every PoS terminal processed only one withdrawal per day, Nigerians would be paying a daily total of N13.27 billion in transaction fees.
This staggering amount highlights the financial strain of the ongoing transition to a cashless society, especially in a country already grappling with economic challenges. The International Monetary Fund (IMF) reported that Nigeria’s GDP per capita fell by 4.74% in 2025, further compounding the economic difficulties faced by ordinary Nigerians.
Economic Implications for the Future
As Nigeria’s population continues to grow, reaching an estimated 236.46 million in 2025, the need for an efficient and affordable financial infrastructure becomes increasingly critical. While the government has made strides in modernizing the economy, policies that push for cashless transactions without sufficient infrastructure are creating financial burdens on citizens.
For the average Nigerian, the cost of using PoS terminals adds up. A worker earning the minimum wage faces not only taxes and rising living costs but also withdrawal fees, which can amount to up to N1,400 for every N70,000 withdrawn. This issue raises concerns about the true cost of Nigeria’s cashless drive and whether it is sustainable for all Nigerians.
As the debate continues, Nigerians are left to weigh the convenience of virtual payments against the growing costs of accessing their own money, especially in a country still struggling with network issues, cash scarcity, and economic instability.
