Business
Across the counter: Customers groan as banks continue cash rationing even in ATMs
Customers of banks are still not happy with the rationing of cash by the deposit money banks. Not even the Automated Teller Machines (ATMs) can close that gap given that they also dispense just a little money which frustrates customers.
Depositors of banks and other stakeholders have expressed concern that they can no longer access their money and the amount they want at any time.
The complaints have increased over the dwindling and epileptic performance of ATMs all over the country.
Customers have been complaining that bank branches ration the cash they give their customers and even the Automated Teller Machines, ATMs, don’t dispense cash and when they do, the cash is rationed per ATM card. This raises the question: why is the performance of the ATM across the country dwindling?
One of the reasons for this development can be blamed on the high cost of running these machines as research has shown that there are about 23,000 ATMs across the country serving more than 200 million Nigerians. This comes to 115 ATMs serving 1000 persons. ATMs are expensive to procure and expensive to maintain; as of 2016 a button, FDK keys, at the sides of an ATM cost about N80,000.
According to Joseph Maleghemi, a Financial IT expert/ATM engineer, the keypad used to enter pins and codes alone costs N380,000 in 2016. Imagine how much it is now. If people are just using ATMs to withdraw money, why would I want to buy more?
This was when naira was ₦200 to $1, which is to say the keys would cost about ₦640, 000 and the keypad would cost about ₦3,040,000 if converted with the current exchange rate. Which could be the reason why the banks are failing to invest in new ATM infrastructure, leaving outdated machines to fall into disrepair.
He advised companies in Nigeria that build ATMs. What companies in Nigeria do is buy the parts and couple it in the country, the same way they couple vehicles. “This makes it very expensive,” he said.
Maleghemi said in his paper that another factor that can lead to this is the acquisition and merging of major banks. “One thing that could have caused the drop is that lots of banks got acquired or merged. In one instance, the acquired bank used to own the highest number of ATMs in Nigeria. After the merger, the bank may have cut back costs by reducing the number of ATMs in a particular location.” This merging can be attributed to the recapitalization policy of the Central Bank of Nigeria, CBN.
The PoS economy taking over
Another factor is that the poor performance of ATMs can be attributed to the various alternatives for cash transactions such as Digital Banking, USSD, and its popular equivalent is the Point of Sale, PoS, operatives and agency banking. In recent times, there are PoS operators in every corner of the nation, including the remote areas that do not have access to banks.
These PoS operators are more active and could be considered more reliable than bank ATMs as they go over and beyond to make the cash available for their customers even to the extent of buying cash.
According to a PoS operator, Oladimeji Aileru, when he cannot get cash from the banks he sources from other sources to get money. “When I go to the bank and you see people on the line at the ATMs, the next minute you look for how to get cash from filling stations or business places that they can give you cash.”
Also a news report by the Leadership reported that A bank official who spoke on anonymity, explained that their bank branches have limited cash and once the cash allocated to the ATMs are exhausted, there will be no cash in the machines till the next day.
Findings by business hallmark showed that ATM along Onigbagbo along Ikeja on Friday had only one ATM of one bank in the area dispensing at rationed capacity and the other banks were not dispensing.
Also similar findings were found in banks along the medical route, computer village, Ikeja. It’s even worse in this case as none of the ATMs were dispensing.
This problem of ATMs not dispensing seems to cut across beyond the walls of Lagos as in Enugu Bank ATM along Zik Avenue Uwani were not dispensing either.
Lamenting a customer said “ATM’s no longer have cash.. you want to withdraw, you find a POS vendor.. this country called Nigeria keeps getting crazier !”
Another concerned customer said “I feel if the ATMs had money and it’s your choice to use POS, complaints will be less. However, you will hardly see an ATM with cash nowadays, forcing you to POS and pay senseless charges. Add to that the fraud that some of those POS operators use that machine for. I lost money to them during the cash crunch. My bank was more than useless.”
Despite the efforts to promote the cashless economy, Nigeria’s progress remains sluggish. The government’s initiatives, such as the Central Bank of Nigeria’s withdrawal fees, aim to reduce cash reliance and mitigate risks like robbery.
However, this measure may inadvertently drive merchants, traders and SMEs to seek alternative and potentially unregulated solutions. Perhaps, to accelerate digital payment, Nigeria can harness the benefits of a cashless society, enhance economic growth and reduce financial risks.