ATM charge may generate N1b for banks quarterly

Automated teller machines (ATMs) may generate up to N1 billion every quarter for banks through the N65 levy on customers’ remote-on-us transactions.

There were about 15,00 active ATMs in hotels and airports at the end of June this year, up from about 12,100 in October last year.

Statistics compiled by the Committee of e-banking Industry Heads (CeBIH), showed that inter-bank cash withdrawals rose from 33.4 million with a value of N91 billion in January 2013 to 66.8 million transactions with a value of N168 billion in December 2013.

Given the figures, customers using the ATMs of other banks may cough out N1 billion every three months.

In the past eight months, banks have acquired about 3,000 ATMs worth over $58 million.

However, James Agada, the Chief Technology Officer of Computer Warehouse Group, which sells and deploys Wincor Nixdorf brand of ATM, argued that the Central Bank of Nigeria (CBN) should not have fixed inter-bank ATM withdrawal fee since it does not help to offset the cost of running the machines.

He blamed inconsistency and interference by the CBN as the reasons why third party investors are shying away from rolling out ATMs in Nigeria, unlike the case in Europe and America.

CeBIH Chairman, Tunde Kuponiyi, countered that the re-introduction of ATM fee is meant to distribute cost between banks and customers, and to discourage uncontrolled use of cash cards on other banks’ ATMs.

Kuponiyi disclosed that some customers engaged in as many as 160 transactions in a month.

“The re-introduced fee of N65 is to ensure that bank customers take up the responsibility for the cost associated with transactions carried out on other banks ATMs.

“It is worthy of note that in reintroducing the charges, three free remote-on-us transactions are allowed per customers per month. This means that banks still bear a cost of N195 per customer per bank,” he explained.

The Executive Secretary/Chief Executive officer of E-Payment Providers Association of Nigeria (E-PPAN), Onajite Regha, noted that ATM management is cost intensive right from purchase to maintenance, so the idea of making it cost free to the consumer was great but unsustainable in the long term.

“The zero payment by consumers did not mean ‘no payments’ for the payment stakeholders. It only meant that the issuer of the card would carry the cost for the holder.

“This could eventually discourage further investments on ATMs and then the consumers will suffer on the long run,” he added.