Banks may reject third-party ATM cards if… – CBN

The Central Bank of Nigeria on Wednesday said Deposit Money Banks might be forced to reject Automated Teller Machine transactions other than theirs if customers failed to accept the N65 ATM service charge it recently re-introduced.

The central bank had come under severe criticism over the reintroduction of the ATM charge last week, two years after it abolished the N100 fee per withdrawal on third-party ATMs.

It noted that customers using other banks’ ATMs would from September 1, 2014, pay N65 fee on the fourth of such transaction within a month.

The CBN said the cost of maintaining the ATMs was too much for the banks to bear and this formed part of the reasons why it, in collaboration with the Bankers’ Committee, reintroduced the charge on bank customers.

The Director of Corporate Communications, CBN, Mr. Ibrahim Mu’azu, explained in a statement that the new charge would help the banks to keep more ATMs serviceable across the country, thereby making banking more convenient for customers.

He added that the N100 was never removed, but was only transferred to customers’ bank to pay.

“Maintaining ATM is expensive and it requires economic incentive for the owners to deploy and maintain these machines. If a part of this cost goes unabated, the banks may be forced to reject transactions coming from their customers at another bank’s ATMs, thereby frustrating the interoperability of the payment systems,” he said.

Mu’azu maintained that the new charge was not intended to discourage financial inclusion, adding that the CBN would not endorse any anti-customer policy.

“Charging of fees on interbank networks is a widely acceptable practice globally,” he stated

According to him, the new ATM charge will ensure that customers get better services, while increasing healthy competition among the banks.

The CBN director also claimed that transaction volumes at other banks’ ATM had increased astronomically owing to what he described as “free cash withdrawal” on other banks’ ATMs.

Consequently, Mu’azu said the development had made the wear and tear as well as the frequency of servicing the ATMs to increase significantly.

“Indeed, some customers were beginning to abuse the use of ATMs through countless daily withdrawals; this development has led to an increase in cash transactions, which negate the central bank’s cash-less policy,” he said.

“The CBN wishes, therefore, to reassure the public that the long-term interests and welfare of all bank customers remain the goal of all banking policies,” he added.