Onome Amuge
The Central Bank of Nigeria (CBN) has introduced new consumer protection rules mandating Deposit Money Banks (DMBs) and financial institutions to refund customers for failed Automated Teller Machine (ATM) transactions within 48 hours. The policy is detailed in a draft document titled “Exposure of the Draft Guidelines on the Operations of Automated Teller Machines in Nigeria.”
The draft guidelines, released recently and signed by Musa I. Jimoh, director of the CBN’s payments system policy department, were circulated to commercial banks, payment service providers, card schemes, and independent ATM deployers. The CBN has called for stakeholder feedback by October 31, 2025, before final adoption of the policy later in the year.
Under the new framework, banks must immediately reverse failed “on-us” transactions, where customers use ATMs operated by their own banks, through automated processes. If technical issues prevent an instant reversal, refunds must be processed manually within 24 hours. For “not-on-us” transactions conducted on other banks’ machines, refunds must be completed within 48 hours.
“Customers must not be made to suffer for failed transactions caused by system errors or network failures,” the circular stated.
The CBN’s directive aims to eliminate delayed refunds for incomplete or failed cash withdrawals, considered one of the most persistent frustrations in Nigeria’s digital payments ecosystem. Customers often wait days or even weeks to recover funds after debited-but-not-dispensed transactions, despite existing rules mandating quick reversals.
The new guideline, analysts say, represents a shift from complaint-driven dispute resolution to automated consumer protection. Banks and ATM operators are now required to deploy software that instantly detects failed transactions and triggers reversals without customers filing complaints.
Institutions holding customer funds due to failed disbursements are obligated to reconcile accounts immediately and refund the money.
Beyond refund timelines, the CBN’s draft guideline seeks to address Nigeria’s chronic shortage and poor maintenance of ATMs. Each bank or card issuer must deploy at least one ATM for every 5,000 active cards, with phased compliance targets of 30 per cent by 2026, 60 per cent by 2027, and full compliance by 2028.
This measure aims to expand financial access, particularly in rural areas where ATM penetration remains low. As of mid-2025, Nigeria had fewer than 20 ATMs per 100,000 adults, far below emerging market averages, according to CBN data.
Any relocation, decommissioning, or deployment of new machines will now require prior approval from the apex bank, a move analysts interpret as part of the CBN’s effort to enforce data-driven regulation of digital infrastructure.
The CBN’s proposed rules also introduce new operational and safety standards. All ATMs must be equipped with anti-skimming technology, CCTV cameras, and must be located in secure, well-lit environments. Machines must comply with Payment Card Industry Data Security Standards (PCI DSS) and maintain audit logs for regulatory inspections.
To promote financial inclusion, at least 2 per cent of ATMs are required to include tactile symbols for visually impaired users — a first in Nigeria’s payment infrastructure design.
In addition, all machines must:
- Dispense cash before returning customer cards to prevent retention errors.
- Allow free PIN changes and issue receipts for all transactions except balance inquiries.
- Display transaction fees clearly before execution.
- Dispense only clean banknotes, with operators mandated to maintain regular replenishment cycles.
- Provide backup power to minimise downtime and ensure 24-hour operation.
Machines that remain inactive for over 72 consecutive hours must be reported publicly, with operators required to disclose reasons and expected resolution timelines.
The CBN said it will conduct regular audits and on-site inspections, with ATM operators required to submit monthly reports on deployment, functionality, and locations. Although the circular did not specify fines, industry officials expect non-compliance penalties to be significant, aligning with the CBN’s enforcement push under Governor Olayemi Cardoso.
