News

From the 'You get what you pay for' file ...

June 24, 2013

An all-out ATM fee ban intended to encourage Nigerians to keep their cash in banks is having the opposite effect, according to a report by All Africa.

As banks cut ATM maintenance costs to recoup lost revenue from out-of-network fees, customers are having an increasingly hard time finding a stocked and working machine.

So ... they're keeping more cash at home.

The fee ban was pushed by the Central Bank of Nigeria as a means to bring the unbanked — and their money — into the financial system, and encourage them to take out small sums at the ATM as needed.

FIs adopted the ban in December, but began to charge a monthly "card maintenance" fee of N100 (63 cents) tomake up for the lost foreign fee of N100 per transaction.

Following public outcry, the CBN stepped in and banned that fee, as well.

So ... the banks slashed ATM maintenance and began to reject certain bankcard brands outright.

An investigation by Leadership found that many ATMs across the Federal Capital Territory neither dispensed cash nor performed non-cash services — especially over the weekend.

"[I]t's so laughable that many people cannot withdraw money using the cards in almost all the ATMs simply because the banks were compelled to remove the N100 charges," said one businessman who has resorted to keeping larger amounts of cash in hand.

"If the banks feel that they cannot provide good services again, the CBN should shut down such banks or merge them with others that are ready to do business," he said.

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