Customers Protest As Banks Justify N65 ATM Fee

Banks’ customers have condemned the reintroduction of charges on withdrawals from remote-on-us automated teller machines (ATMs), even as the banks explain that the move was to cut costs and reduce unnecessary multiple withdrawals.

Late last year when the Central Bank of Nigeria (CBN) announced the cancellation of the N100 ATM fee, many bank customers hailed the move.

However, the reintroduction of charges on withdrawals from other banks’ ATMs has spurred negative reactions from the customers.

Some bank customers who spoke with LEADERSHIP noted that the reintroduction of the charges would not only burden them with more costs but also take the cashless policy a few steps backward as the use of ATMs would be reduced.

The CBN had last week announced the introduction of a N65 charge on cash withdrawals from remote-on-us ATMs. Remote-on-us ATMs refer to ATMs of other banks other than the issuer of the card. According to the CBN, the charge shall be applicable from the fourth remote-on-us cash withdrawals in a month. This means that the first three remote-on-us withdrawals in a month is free, except if the customer uses the card at the issuer’s ATM.

Bank customers expressed their displeasure at the new development, saying the CBN, along with the banks, had succeeded in raising their hopes and dashing it again. A bank customer, Ofon, stated that he would have to watch his use of ATM and carry more cash. According to him, his bank does not have branches around his environs and he has to make use of other banks’ ATMs. He said he would be incurring additional cost if he does not want to carry cash around.

However, bankers and the CBN explained that the re-introduction of the ATM charge had been necessary as banks are incurring more costs on the indiscriminate use of the ATM by customers. According to the director, Banking and Payment System, Central Bank of Nigeria (CBN), Dipo Fatokun, some customers had turned the ATMs into their personal wallets.

“Between 2012 and recently when the review was done, it was discovered that people have actually turned ATMs into their personal purses because nothing is charged. If somebody needs N500, N1,000, he would go to an ATM to withdraw such that in a day, some people can patronise ATMs up to five times and this has created a huge cost burden for the banks that issue the cards,” he said.

Fatokun explained that the cost of using remote-on-us ATMs comes at a cost to the issuing bank.   “In going to other ATMs to make withdrawals, your bank, that is the acquirer bank, incurs a cost of N65 which they pay to the switches and the owner of the ATM that you are using,” Fatokun said.

Likewise, the managing director and chief executive of Access Bank, Herbert Wigwe, noted that after the N100 charge was removed, some customers had made up to 500 withdrawals in a month. This, he said had put more burden on the banks and affected profitability. But bank customers on the other hand do not hold the same view as one ATM user declared that she usually withdraws all she wants at once, while another customer said the CBN should ensure that the banks invest more in ATMs and improve on their services.