No More Free ATM Withdrawals: CBN’s New Charges Take Effect March 1

In a move that will shake up how Nigerians access cash, the Central Bank of Nigeria (CBN) has scrapped the three free ATM withdrawals customers previously enjoyed when using other banks’ ATMs. Starting March 1, 2025, every withdrawal from an ATM that isn’t owned by a customer’s bank will now attract a fee—N100 per N20,000 withdrawal at bank premises and an additional surcharge of up to N500 for off-site ATMs.

While the CBN says this policy will drive more ATM deployments and improve efficiency, the reality is that it will reshape customer behaviour, impact business operations, and could further push Nigeria toward a cashless economy. But is this change a step forward or just another burden for consumers?

A Blow to Consumers, A Win for Banks?

For everyday Nigerians, this move means one thing—higher banking costs. Many rely on ATMs as a primary way to access cash, especially in areas with unreliable POS networks or limited digital banking adoption. Now, using another bank’s ATM will come at a price, forcing customers to rethink how they withdraw cash.

But for banks, this is a financial win. These charges, coupled with an additional surcharge for off-site ATMs, mean higher revenue from ATM transactions. It also allows banks to recover some of the costs of maintaining cash machines, an argument the CBN has used to justify the change.

For businesses, particularly those that operate heavily in cash transactions—such as markets, transport services, and small retailers—this move could have mixed effects. On one hand, customers may withdraw less frequently, reducing cash-based purchases. On the other hand, it might accelerate the shift toward mobile payments and POS transactions.

With the added costs of ATM withdrawals, more people could lean into digital banking options, like bank apps and online transfers. This aligns with the CBN’s broader cashless policy, but whether businesses, especially in informal sectors, are ready for this shift remains to be seen.

The Bigger Picture—Regulation, Banking Efficiency, and Customer Trust

The timing of this directive is notable. It comes just after the CBN fined nine banks a total of N1.35 billion for failing to ensure cash availability at ATMs during the festive season. The move suggests the apex bank is tightening control over cash distribution while subtly nudging customers toward digital alternatives.

However, the real test will be in customer reactions. Will people withdraw large sums at once to avoid multiple charges? Will off-site ATMs see reduced usage due to the extra surcharge? And most importantly, will banks ensure that their own ATMs remain stocked and functional so customers aren’t left with no choice but to pay these fees?

Final Thoughts—Who Really Benefits?

CBN’s decision to eliminate free ATM withdrawals is another sign that Nigeria’s banking landscape is evolving. While banks stand to gain, consumers and businesses may have to rethink how they handle cash. For businesses that rely on cash transactions, this could mean adjusting to increased digital payments sooner than expected.

But with March 1 fast approaching, one thing is clear—Nigerians will have to start making more strategic banking choices to avoid unnecessary fees. The bigger question is whether this change will truly lead to better banking services or simply make transactions more expensive for the average customer.