The Central Bank of Nigeria’s (CBN) directive limiting cash disbursement is causing ripples among Point of Sale (POS) agents in Lagos, many of whom are raising withdrawal fees to cope with the changes.
The directive, issued on Tuesday, imposes a daily transaction limit of ₦1.2 million for each POS agent and caps individual customer withdrawals at ₦100,000. This move, part of the CBN’s broader effort to control cash distribution, could significantly alter the agent banking model that has become vital since Nigeria’s cash scarcity crisis in 2023.
“The decision took us by surprise,” said Semiu Ajayi, a POS agent in Gbagada. “I’ll just increase my withdrawal charges. It used to be ₦4,000 for a ₦100,000 withdrawal, but now I’ll charge ₦6,000 or more.” Ajayi’s approach reflects the broader sentiment among agents, who are passing on the burden of the policy to customers.
POS agents have played a critical role in Nigeria’s financial inclusion efforts, especially in the wake of a currency redesign in 2023 that triggered a severe cash shortage. As traditional banking channels such as ATMs and bank counters struggled to meet demand, POS agents became essential intermediaries, often sourcing cash from informal networks.
Despite their crucial role, POS agents have faced criticism for charging steep fees and perpetuating a reliance on cash, which some argue undermines the CBN’s push for a cashless economy.
With over 2 million agents now subject to the new rules, many fear the policy will reduce customer traffic and profitability. “How will we survive with this new CBN policy?” asked Shade Raheem, a POS operator in Ikeja. “They just want to push customers to the banks.”
Some agents, however, are exploring ways to navigate the restrictions. Tade Oluwanisola, a POS agent in Ikorodu, plans to distribute transactions across multiple terminals to manage demand. “We plan to acquire more terminals to handle the limits,” Oluwanisola explained. “Not every customer will withdraw up to their limits daily, so we will spread the demand.”
The CBN insists that the new withdrawal limits are necessary to curb fraud, standardize operations, and regulate the sector. It has also mandated that POS agents register with the Corporate Affairs Commission (CAC) by September 2024.
“The CBN will conduct oversight of the aforementioned actions, including impromptu backend checks, to ensure compliance,” the regulator stated in a circular issued on December 17. Non-compliance will attract penalties, including fines and administrative sanctions.
While supporters of the policy argue that it will bolster the cashless economy and enhance regulatory standards, POS agents warn it may disrupt the critical role they play in ensuring cash accessibility for Nigerians. As the sector adjusts, customers are likely to bear the brunt of higher fees and reduced access to cash.
