The traditional use of Automated Teller Machines (ATMs) in Nigeria is rapidly declining as Point-of-Sale (POS) agents now process an overwhelming share of cash transactions.
According to data reported by The PUNCH, POS agents handled a staggering ₦223.2 trillion in financial transactions between 2017 and 2023.
The data, sourced from the Nigeria Inter-Bank Settlement System (NIBSS), shows that more Nigerians are embracing the convenience of POS agents, especially in urban centers and rural communities where ATM access is limited or machines often run out of cash.
In contrast, ATM withdrawals, which peaked at ₦8.6 trillion in 2020, dropped significantly to ₦5.73 trillion by 2023. The shift is a result of several factors, including high ATM downtime, long queues, and the expansion of mobile payment systems.
Experts say the shift reflects the success of financial inclusion efforts, particularly through agency banking and fintech innovations. The Central Bank of Nigeria has also encouraged this movement by licensing more agents and pushing for a cashless economy.
Financial analysts note that while POS agents have helped close the banking gap in underserved regions, the sector still faces challenges like fraud, poor connectivity, and regulation gaps. However, its dominance is clear—POS platforms have become the go-to for everything from daily cash withdrawals to business transactions.
With the rising cost of ATM maintenance and the growth of agent networks, banks themselves are scaling down ATM deployments and investing more in POS infrastructure and mobile banking.
As Nigeria's economy continues to digitize, analysts predict that the gap between POS usage and ATM withdrawals will widen even further in coming years.
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