Nigerians Lament Exploitation by POS Agents Amidst Flawed Cashless Policy Implementation

The Executive Director, e-Business and Infrastructure, Inlaks Computers Limited, Tope Dare, has attributed the cashless situation faced by businesses and individuals, leading to the exploitation by Point-of-Sales operators, to the tacky process of putting the cashless policy together and the poor handling of the same by banks.Dare gave his opinion on Friday during a public lecture he organised, themed “The Cash War Between ATMs and POS Agents in Nigeria.

”He asserted that the lecture was aimed at proffering solutions to currency scarcity, adding that bankers have largely placed the blame on the CBN’s cashless policy. Dare argued that cash shortages stem from regulatory policies rather than banking inefficiencies, adding that despite the push towards a cashless society, cash remains a crucial part of Nigeria’s economy.

He said, “The CBN’s cashless policy has created persistent cash shortages. People now prefer to hoard cash instead of depositing it in banks. The ATM withdrawal limits are there to ensure wider cash distribution.”

He explained that many Nigerians depend on physical cash for their daily transactions, requiring a balanced approach to financial inclusion, stressing that the POS agents evolved from mere alternatives to traditional banking services into crucial intermediaries as well as first-choice service centres for cash supply.Dare, however, pointed out that the high fees they impose, unchallenged, have incentivised them to source cash through desperate and unethical means, such as withdrawing cash straight off ATMs to fulfil their demand for cash, defeating the purpose of the ATMs.

He continued, “This dynamic has left regular bank customers at a disadvantage due to the resulting congestion at ATMs and higher transaction costs for everyday users. While we must acknowledge that these agents bridge the gap left by banking institutions, they often do so at a steep price for consumers.

The dissatisfaction of these users is palpable across the country, and something must be done before the situation devolves further. It also created an unintended consequence: ‘a parallel market for cash.

“Many POS operators now obtain cash through two major avenues: purchasing cash from businesses, where they collect physical cash from local businesses in exchange for digital transfers with a fee, creating an informal economy of cash distribution, and withdrawing directly from ATMs, as POS agents often drain ATMs by making multiple withdrawals with different debit cards issued by their numerous banks, further limiting access for regular bank customers.”

He said that a survey conducted on street users revealed a preference for POS withdrawals despite the high fees.He added, “Respondents cited factors such as proximity, speed, customer service, and cash availability as reasons for their choice.

Many also noted that POS agents are more personable and relatable than traditional bank staff despite their lack of formal customer care training. As of March 2024, Nigeria had approximately 2.7 million deployed POS terminals, compared to less than 21,500 ATMs, with over 63 million unique bank clients.

This disparity highlights the growing reliance on POS machines. However, the ATM network in Nigeria faces several issues, such asLow withdrawal limits: customers often cannot withdraw more than N5,000–N10,000 per transaction, leading to multiple withdrawals.

This system is disproportionately affecting individuals who rely on cash, such as traders, transport workers, and elderly citizens who struggle with digital banking platforms.”

He, however, commended the CBN’s moves by penalising banks that fail to ensure adequate cash availability, encouraging customers to report ATM cash shortages for prompt action, increasing oversight, and imposing fines on underperforming financial institutions.