Rising PoS withdrawal charges have been attributed to cash scarcity and higher costs, according to PoS agents who spoke to Techpoint Africa.
PoS agents have become a vital part of Nigeria's push for financial inclusion, replacing the need for automated teller machines (ATMs) in most parts of the country. However, that shift has come with its costs.
Withdrawals of ₦5,000 and below previously incurred a charge of ₦100, while withdrawals exceeding ₦5,000 but under ₦10,000 attracted a fee of ₦200. During the cash scarcity prompted by the CBN's currency redesign initiative, these charges briefly spiked.
However, in the past month, the rates have stabilised at higher levels: withdrawals of ₦5,000 or less now cost between ₦150 and ₦200, while withdrawals ranging from ₦5,000 to ₦10,000 are consistently charged at ₦200.
Nathaniel, a PoS operator in Enugu, disclosed that he increased charges for withdrawal in December 2024 following the introduction of the electronic money transfer levy.
"I increased it because of the charges that PoS people increased because each transaction that is above ₦10,000, they usually collect ₦50. For example, if I get a transfer of ₦10,000 to my PoS, they'll subtract ₦50 from that money. For me to compensate for that, I have to increase my own, too," he shared, noting that the decision was taken independently.
In addition to the levy, agents revealed that they have struggled to get cash from banks, forcing them to buy cash from individuals and businesses. The costs of getting the cash are then passed on to the end user.
"If you go to the bank, they don't normally give big money. They'll just give you ₦10,000, and it's not enough," Favour, another PoS operator in Enugu, revealed.
Unsurprisingly, these increases have drawn the ire of customers, with the agents noting that most customers have expressed their displeasure.
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"People are complaining, but they are still coming because they don't have any other option. When I increased my charges from ₦200 to ₦300 for ₦10,000, people were complaining. But they still prefer to use here than to go to banks," Ifeoluwa, a PoS agent in Lagos, said.
But not all agents have been as lucky as Ifeoluwa. Blessing revealed that she has seen reduced patronage since the increase, with customers now embracing transfers for payments rather than withdrawing cash from PoS terminals.
According to Oluwagunwa Ibirogba, Chairman of the Lagos Chapter of the Association of Mobile Money & Bank Agents of Nigeria (AMBANN), the increase in withdrawal charges was inevitable following the introduction of the levy. He, however, noted that the association hopes to negotiate a lower fee, which could convince agents to reduce the withdrawal fees.
Although the levy only applies to transactions above ₦10,000, the withdrawal fees for amounts below ₦10,000 have also been increased.
Ibirogba points out that the association encourages members to keep fees within specified limits but concedes that it is difficult to enforce compliance. Meanwhile, he shared that the association is also working on reducing incidents of cash sales.
While he notes that some agents may increase prices unfairly, he adds that the cost of doing business in Nigeria has increased in recent times, forcing many agents to review prices upwardly.
"Cost of living has increased. The cost of procurement of other things that surround the agency banking has also increased. You have dispense papers that come with the terminals; you have space; you have logistics; you have electricity where need be. So all these costs have to be taken care of," he noted.
While PoS agents have been instrumental in bridging the gap between formal banking services and underserved communities, the rising cost of cash withdrawals has drawn significant criticism. For many Nigerians, the high fees undermine the very purpose of these services, leading to growing calls for the Central Bank of Nigeria (CBN) to regulate withdrawal charges.
However, the solution goes beyond regulation. Ensuring consistent cash availability is crucial, as agents often resort to increasing fees when forced to buy cash. Yet, this presents a dilemma: increasing cash availability may conflict with Nigeria's broader goal of encouraging digital financial transactions.
Ultimately, the future of Nigeria’s PoS ecosystem will depend on striking the right balance between these competing priorities — making cash accessible while simultaneously fostering a seamless transition to digital payments. How policymakers navigate this challenge will shape the sustainability and inclusivity of the country’s financial services landscape.
