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Cash withdrawal on other banks’ ATM rises 172.9%

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Following the removal of N100 charge on ATM in 2012, the cash withdrawal on other banks Automated Teller Machines (ATM) by customers rose by 172.9 percent to N262 billion in 2013, from N96 billion in 2012, according to Committee of E-banking Industry Heads (CeBIH).

In 2012, the number of transaction done on other banks’ ATM did not go beyond 8.5 million counts of transactions.

During the peak period, it was13.4 million in September 2012, but in December when the N100 charge was removed, transaction grew astronomically, and between January 2013 and December 2013, transaction count had grown to 24.7 million.

Tunde Kuponiyi, chairman of CeBIH, said the effect of the increase in the volume and value of ATM transactions was: a huge burden placed on the banks to pay for the cost of transactions their customers carry out on other banks’ ATM.

To the customer, the transactions were free, however, banks had to pay N55 acquiring fee and N10 switching/processing fee, making a total of N65 per transaction.

Secondly, the removal of the transaction charges encouraged access to cash and reduced the rate of adoption of alternate payment channels such as the PoS, online payments, internet banking, mobile money applications, electronic money transfers, etc.

“This behavioural pattern clearly negates the aims and objectives of the Central Bank of Nigeria in introducing the cash-less policy, which has been introduced in all states of the federation,” Kuponiyi said.

In addressing the negative impacts of the removal of the charges, the CBN in collaboration with relevant stakeholders in the industry reviewed the impacts of the removal and re-introduced the ATM withdrawal fee.

According to Kuponiyi, the re-introduced fee of N65 is to ensure that bank customers take up the responsibility for the cost associated with transactions carried out on other banks’ ATMs, saying “it is worthy of note that in reintroducing the charges, three free remote-on-us transactions are allowed per customers per month. This means that banks still bear a cost of N195 (N65*3) per customer per bank.”

He encouraged the banking public to adopt the various alternative payment channels that all banks in the country have made available in realisation of the aims and objectives of the cash-less policy and the attainment of the Payment System Vision 20:2020.

Article Credit: Businessdayonline

Updated 4 Years ago

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Tags:     ATM     Tunde Kuponiyi     Central Bank of Nigeria