CBN Directs Banks to Increase ATM Terminals to Ease Reliance on PoS

By Adedapo Adesanya

The Central Bank of Nigeria (CBN) has introduced new minimum standards for Automated Teller Machines (ATMs) across the country as part of efforts to make more cash points available and reduce the growing reliance on Point-of-Sale (PoS) terminals.

The move, contained in a draft circular titled Exposure of the Draft Guidelines on the Operations of Automated Teller Machines (ATMs) in Nigeria, build up on previous regulations and is aimed at improving accessibility, security, and consumer protection in ATM operations.

The directive comes amid a sharp increase in the use of PoS terminals across Nigeria. As of March 2025, there were about 8.3 million registered PoS machines nationwide, while deployed terminals stood at 5.56 million in December 2024, a 127 per cent rise from the previous year.

The surge in PoS usage has turned merchant-based withdrawals into a major part of everyday cash transactions, but it has also come with a lot of worries.

According to the new guidelines, all card-issuing institutions must deploy at least one ATM for every 5,000 payment cards issued. The implementation will be gradual, with 30 per cent of the target to be achieved by 2026 and full compliance by 2028.

By increasing the number of ATMs nationwide, the CBN hopes to ease pressure on the PoS network, expand banking touchpoints, and strengthen confidence in the country’s payment infrastructure.

The CBN’s latest policy seeks to address this imbalance by ensuring that banks deploy more ATMs to meet public demand for easy and secure access to cash.

ATMs must be located in safe and secure environments that guarantee user confidentiality, and those installed outside buildings must be bolted to the floor.

Any deployment, relocation, or removal of ATMs will require prior written approval from the CBN.

Independent ATM Deployers (IADs) must also obtain CBN approval, fulfill licensing requirements, and show evidence of partnership with a bank responsible for cash supply.

To strengthen consumer protection, the CBN ordered that failed “on-us” transactions, those carried out on a customer’s own bank ATM, must be reversed instantly, or within 24 hours if technical issues occur.

For “not-on-us” transactions conducted on other banks’ ATMs, refunds must be completed within 48 hours.

The guidelines also mandate automatic refund mechanisms that initiate reversals without the customer or issuing bank having to raise a complaint.

The new framework also places emphasis on security. All ATMs must have cameras that record persons and activities such as card insertion and cash dispensing but must not record customer keystrokes.

They must also be equipped with anti-skimming devices to prevent card fraud. ATM encryption keys must be changed annually and cannot be used for multiple machines, while customers are allowed to change their PINs free of charge.

Furthermore, the apex bank noted that all deployers and acquirers must comply with the Payment Card Industry Data Security Standards (PCI DSS) to ensure data safety and transaction integrity.

Operationally, ATMs must remain functional with downtime not exceeding 72 consecutive hours.

The CBN also noted that where this is unavoidable, customers must be informed.

Banks are also required to ensure that cash is always available in their ATMs, and even where non-bank deployers are involved, the partner bank remains fully responsible for cash provisioning.

Also, each ATM must clearly display customer service contacts, charges, and fees, and provide receipts for all transactions except balance enquiries.

To enforce compliance, the CBN said it will conduct regular audits and on-site inspections to verify service quality, cash availability, and adherence to the guidelines.

All institutions must also submit monthly reports on new ATM deployments and related activities no later than the fifth day of the following month. Defaulters will face penalties and other regulatory sanctions.

The apex bank said the new measures are designed to guide ATM deployers on density requirements, enhance consumer protection, and improve access to cash through secure and reliable channels.