Point of Sale (PoS) service providers across Nigeria are implementing over 50% fee hikes for cash deposits and withdrawals, attributing the surge to a growing scarcity of the Naira in banks.
Nairametrics investigations reveal that POS operators in areas such as Lagos and Abuja are adjusting transaction charges due to challenges in accessing sufficient Naira from banks or ATMs.
For instance, in Karu, Abuja, a POS operator disclosed an increase from N200 to N250 for a N10,000 transaction, reflecting a 25% surge in charges. Meanwhile, at Aya junction in Abuja, another operator named Ms Felicity raised fees to N200 for N5,000 and N300 for N10,000, marking a significant 100% and 50% increase, respectively.
In Lagos, an operator, Mr. Joshua, indicated that the prevalent cash scarcity has compelled him to raise charges. Formerly charging N100 for a N5,000 transaction, he now demands N200, and for a N10,000 transaction, the fee is now N300, representing a 100% and 50% increase, respectively.
Mr. Joshua, stationed in Iyana Ipaja, Lagos, highlighted the challenges in obtaining cash from banks and ATMs. He revealed that some banks only release N20,000 per day, forcing POS merchants to acquire cash at a higher cost than usual. The approaching festive period has intensified cash withdrawals, exacerbating the difficulties in maintaining the same pricing structure.
POS operators also face obstacles from security guards in banks who restrict access to ATMs, reserving them for non-POS operators. Ms Felicity noted that she charges up to N300 per N10,000 withdrawal due to the complexities associated with accessing cash from ATMs.
Adding to the challenges, Mr. Rabs POS Services in Abuja mentioned that banks release only N20,000 per day, compelling operators to maximize profits on the limited cash available.
The Central Bank of Nigeria (CBN) has countered these claims, asserting that there is sufficient cash in circulation. The acting director of Corporate Communications, Hakama Sidi-Ali, highlighted an increase in currency in circulation from N1 trillion in February 2023 to over N3.4 trillion by December 11, 2023. She attributed the cash hoarding to apprehension caused by the naira redesign policy and assured Nigerians of ample cash availability for daily transactions during the holiday season.
However, the holiday effect is contributing to increased cash hoarding as people prepare for Christmas and New Year celebrations. This surge in demand for cash has further strained the available supply, affecting various transactions. Hakama Sidi-Ali acknowledged the impact of holiday-related cash withdrawals but reassured Nigerians of the CBN’s commitment to meeting transaction needs during the festive season.
