The use of Point of Sale terminals in Nigeria has seen a dramatic rise, handling transactions valued at N223.27 trillion in 2024—more than double the N110.35 trillion recorded in 2023, according to the Central Bank of Nigeria’s latest quarterly statistical bulletin.
This surge highlights a nationwide shift from traditional Automated Teller Machine withdrawals to POS platforms, with the number of POS transactions jumping from 9.85 billion in 2023 to 13.08 billion in 2024—a 32.7 per cent increase.
In contrast, ATM transactions remained relatively stagnant, inching up slightly from 1.012 billion to 1.022 billion, with the total value of ATM withdrawals rising marginally to N29.12 trillion in 2024 from N28.21 trillion the previous year.
The report underscores growing consumer preference for the speed and accessibility of POS agents, many of whom now operate across both urban and rural areas under the agency banking model.
“The figures show a shift in how Nigerians are choosing to transact. Convenience and access to nearby POS agents seem to be driving this trend,” said financial analyst, Ibrahim Yusuf. “But the surge also brings along concerns around fraud and increasing service charges.”
Throughout 2024, monthly POS transactions recorded steady increases. For example, in January alone, transactions soared to N11.50 trillion—over twice the N5.28 trillion recorded in January 2023. Meanwhile, ATM withdrawals dropped sharply to N2.15 trillion from N3.24 trillion.
This pattern continued into subsequent months, peaking in December when POS transaction value reached N31.84 trillion, while ATM usage also hit its highest point at N3.91 trillion—still a distant figure compared to POS activity.
However, the growing dominance of POS transactions has not been without complications. During the festive period in December, customers were subjected to inflated transaction charges, with some POS agents demanding as much as N200 to withdraw N5,000. At the same time, many ATMs were out of service due to cash shortages, leaving customers stranded.
“It was frustrating,” said Lagos resident Ifeoma Chukwu. “The banks didn’t have cash, ATMs weren’t dispensing, and the only option was POS agents, who were charging exorbitantly.”
Reacting to the development, the CBN fined nine commercial banks—including First Bank, Zenith, UBA, and Sterling Bank—a combined N1.35 billion for failing to ensure cash availability through ATMs during the holiday period.
Beyond charges, security concerns also emerged. According to the FITC’s Fraud and Forgeries Report, POS-related fraud rose by over 31 percent in the first quarter of 2024, with 3,518 reported cases—up from 2,683 in Q4 2023. These fraud cases accounted for nearly a third of the total 11,472 fraud incidents recorded in that quarter.
To curb rising fraud and strengthen its cashless policy, the CBN has imposed stricter regulations on POS operations. A recent circular caps daily cash withdrawals by individual customers through POS agents at N100,000 and limits total daily transactions per agent to N1.2 million.
Additionally, all POS agents are now required to process transactions through designated float accounts and report daily activities to the Nigerian Inter-Bank Settlement System (NIBSS). Principal institutions overseeing these agents will be held liable for any violations.
“Regulation is necessary to maintain trust in the system,” noted fintech expert Amaka Nwachukwu. “The CBN’s move to tighten compliance is timely, especially with the explosion in agency banking and POS reliance.”
Despite these challenges, industry observers believe the trend toward POS transactions is likely to continue, especially with the growing role of fintech companies such as OPay, Moniepoint, and Kuda, who currently control around 70 percent of Nigeria’s POS market.
