The Central Bank of Nigeria (CBN) is re-introducing charges on ATM withdrawals on remote-on-us transactions. This means that is a customer of Bank A withdraws cash from an ATM belonging to Bank B, (s)he will now pay N65 as a transaction charge. Currently the transaction charge is zero. This policy takes effect from September 1, 2014.
The circular posted on the financial regulator’s site yesterday is shown below:
The Central Bank of Nigeria, in collaboration with the Bankers Committee had in December, 2012 transferred the payment of N100 fee on “Remote-on-us” ATM Cash withdrawal transactions to issuing banks. The fee is shared between the acquirers, issuers, and switches. On the commencement of the arrangement in December 2012, banks (issuers) decided to waive the issuer fee (N35), which should have ordinarily been an income to them. Consequently, banks only bore the cost of N65 each time their customers use another bank’ ATM.
However, as a result of the unintended consequences of the decision, which has resulted in substantial cost burden incurred by banks in defraying the cost for the service, the payment structure for card carrying bank customers is hereby reviewed, in line with present realities.
Therefore, the CBN hereby issues the following directives:
- The re-introduction of ‘Remote-on-us’ ATM cash withdrawal transaction fee, which will now be N65 per transaction, to cover the remuneration of switches, ATM monitoring and fit-notes processing by acquiring banks;
- The new charge shall apply as from the 4th ‘Remote-on-us’ withdrawal (in a month) by a cardholder, thereby making the first three ‘remote-on-us’ transaction free for the cardholder, but to the paid by the issuing bank.
- September 1, 2014 shall be the effective date for the implementation of the new fee;
- Banks are expected to conduct adequate sensitisation to the customers on the introduction of the new fee;
- All ATM cash withdrawals on the ATM of issuing banks shall be at no cost to the cardholder.”
The circular was signed by Dipo Fatokun, the Director for Banking & Payments Systems.
