Financial technology experts and heads of electronic banking of financial institutions have urged the Central Bank of Nigeria (CBN) to hands off the charges on remote-on-us Automated Teller Machine (ATM) transactions and reduce regulation which they said has increased cost of operating ATMs and reduced deployment.
Speaking at the Fintech 1000 Special Webinar yesterday, operators in the banking and financial technology space, said the rising cost of deploying and maintaining ATMs have been the major reason for the reduced deployment level of the ATMs in the country.
Speakers at the event had jointly called on the CBN to allow banks to rightly charge customers for using remote-on-us ATMs, whereby a customer uses his or her card on an ATM that is not his or her bank, rather than fixing the charge at N65 after the third withdrawal in a month.
The CBN had cut down the charges of remote-on-us withdrawals from N100 per transaction to N65 and made the first three withdrawals in a month free in 2015. However, speakers at the event noted that the remote-on-us costs banks about N100 and the cost have become heavy on the banks.
As at December 2019, total number of ATMs deployed in the country stood at 17,518 lower than 18,615 ATM that had been deployed in 2018, signifying a decline in deployed ATMs.
According to head of eChannels at First Bank, Bob Nwojo, Nigeria’s total ATM per 100,000 adults is four times less than that of South Africa.
Noting that with similar population figures, Brazil has nearly 10 times the number of ATMs than Nigeria and covers four times the number of branches per 100,000 customer, Nwojo said regulation on deployment have been one of the factors affecting the low number of ATMs in the country.
On his part, executive director at Inlaks, Tope Dare noted that, there is need to revisit the regulation on deployment as it takes up to three to six months for banks to get approval from the CBN extending the timing for ATM deployment to about one year.
Noting that despite the declining number and low level of ATM points in the country, the channel is still heavily utilised as it remains the preferred and trusted channel, Dare said deploying ATM is capital intensive and is not profitable for banks in Nigeria.
Secretary, Product Pricing & Revenue Assurance at Committee of E-Banking Industry Heads (CeBIH), Oladipupo Alabede, while also speaking at the event, noted that expenses of remote-on-us has been on the rise. He added that many banks are no longer deploying off-site ATMs due to the cost of deployment and maintenance.
“Off-site ATMs are more expensive and difficult to manage” he said.
Similarly, Divisional chief executive at Interswtich, Akeem Lawal said that, the present condition cannot attract independent ATM operators as he said “it costs banks almost N100 to deliver cash to customers at ATM and for independent providers the cost rises to N200.”
A participant at the webinar, Ayodele Ogundare noted that “if cash is the king, people don’t care about the cost. The CBN should be more involved in reducing hardship around the use of the ATM and leave the cost for banks to fix in order to be profitable and the business encouraged.”