Automated Teller Machines of commercial banks across the country have become virtually redundant as Point of Sale operators have taken over the market.
Worried about the provoking situation, the Central Bank of Nigeria on Friday read the riot act to banks over activities of their staff which was allegedly hindering the flow of cash in the economy.
The CBN said it had observed that malpractices and desperation to support the profiteering motive of Point of Sale operators in connivance with staff of banks, who are in many cases owners of the terminals, were inhibiting efficient circulation of cash.
The CBN further disclosed that it has consistently made cash available to banks based on their request for withdrawals at any of the apex bank’s 37 locations nationwide.
This, the apex bank noted, was evidenced by the significant increase in currency-in-circulation between the last quarter of 2023 and end-June 2024.
It has been observed that bank officials that own PoS terminals give priority to the operators to support their business.
Spot checks had also revealed that PoS operators conducting business around ATMs oftentimes take advantage of stranded customers.
These operators corner/purchase cash from high cash generating entities including petrol stations and supermarkets at a premium to fund their operations, thereby disrupting flow of cash to banks for processing and redistribution
However, this is not the first time the CBN had identified cases of collusion between banks and PoS operators.
In December 2023, the CBN warned Deposit Money Banks and Point-of-Sale operators against acts that undermine the availability and flow of cash across the country.
The CBN also said it was investigating reported cases capable of defeating the smooth running of the economy.
Investigations across the country indicated that most bank ATMs hardly dispense, while those that do have placed restrictions on the amount a customer can withdraw in a day.
The number of PoS machines deployed by merchants and individuals across the country rose to 2.7 million in March this year, the Nigeria Inter-Bank Settlement System disclosed in the latest electronic payment data released recently.
This represents a 50 percent increase year-on-year when compared with the number of deployed terminals in the same period last year, which was 1.8 million.
The March 2024 figure indicated that a total of 864,753 new PoS terminals were deployed last year.
However, the figure for deployed PoS is still lower than the total registered terminals.
According to the NIBSS data, a total of 3.730 million PoS machines had been registered across the country as of March 2024, which shows that a total of 1.04 million terminals are either yet to be deployed or have become inactive.
The value of transactions over PoS terminals nationwide has also been growing consistently over the years. However, data for March 2024 shows that there was a decline when compared with last year’s figure.
According to NIBSS data, the value of PoS transactions for March stood at N961.8 billion. This shows a 16.5 percent decline compared with N1.15 trillion recorded in March 2023.
Nevertheless, the record in March last year, when the PoS value hit an all-time high, is attributable to the unusual cash scarcity during the period, which forced many Nigerians to embrace electronic transactions.
Aside from the 2023 cash scarcity, the growth of PoS transactions in Nigeria is being driven by many factors, which include rapid adoption by merchants for receiving payments.
It is unfortunate that many bank customers prefer to patronise these PoS operators to withdraw money instead of visiting ATMs that on many occasions were not dispensing cash.
Many frustrated bank customers claim that even if they found the ATMs dispensing, they are discouraged by the long queues, considering that beyond cash, the machines offer other services.
“Nowadays, the ATMs have become mere ornaments and they are rarely dispensing cash because of the conspiracy between the bankers and the PoS operators.”
Countless bank customers no longer go to the ATMs to withdraw cash because PoS operators are available next door, and their charges are relatively low when compared with the cost of transportation to and from where the ATMs are located.
The truth is that most of these banks are the owners of the PoS machines, which they give to the operators, so they will rather make sure they have the cash first before ATMs.
The issue of PoS has brought ease of access to customers’ money, although there are cases of identity theft and fraud by some PoS operators.
Sometimes, out of five ATMs, only one is working and the rest have no cash, coupled with restrictions and limitations on how much a customer can withdraw.
These days, banks don’t even load their ATMs with cash, which is why some people are speculating collaboration between the PoS operators and the banks.
Most shops now have their PoS machines, thereby saving themselves the task of getting cash before buying items in the market.
Nowadays, the ATMs have become mere ornaments and they are rarely dispensing cash because of the conspiracy between the bankers and the PoS operators.
Findings showed that bank workers and PoS operators work together to milk Nigerians by always making cash available to PoS operators.
Almost all the ATM machines don’t have money to dispense at weekends leaving customers to patronize the PoS operators who in turn increase their charges.
There are also allegations that the PoS operators work round the clock, visiting bank ATMs to mop up cash available there before daybreak and thereafter sell at exorbitant prices to the citizens.
The bank workers collude with PoS operators to control the availability of cash, thereby causing artificial scarcity.
They are causing artificial scarcity of naira because most Nigerians prefer to patronize them rather than go to the bank because they control the availability of naira.
The CBN needs to beam its searchlight on this area of banking operations with a view to check the excesses of PoS operators in the country before they constitute another problem to the economy.
