ATMs Run Dry, POS Machines Takes Over Cash Transactions

Since most bank automated teller machines (ATMs) do not dispense cash, most bank customers rely on mobile money transfer agents, especially point-of-sale (PoS) terminal operators, to conduct their banking transactions, more specifically cash withdrawals, Journalists reported.

Reports findings over the weekend revealed that many ATMs are not dispensing cash. Even the few who use cash had withdrawal restrictions as most banks have limited ATM withdrawals of other banks to 5,000 naira per transaction.

Most ATMs were purely for bank appearances as they did not function at all or had no cash to dispense.

The situation, which has been ongoing for the past few weeks, has seen a significant boost in business for Lagos PoS operators across the country. From major business districts to suburbs, bank customers have to pay PoS fees to operators to access funds deposited in various banks across the country. Though banks say they are supplying cash to their ATMs, most machines are empty most of the time.

A bank official, who preferred anonymity, explained that each branch has a limited amount of cash and that once the cash allocated to an ATM runs out, the machine will be empty until the next day.

Zakariya Temidayo, a bank customer who lives in Egbeda area of ​​Lagos, explained that most people who visit the bank’s ATMs, which have about six terminals, only dispense one or two coins of cash, resulting in queues at the few payment points.

“Because of the stress I pass through while trying to withdraw from banks, I have decided to use PoS for my transactions, even though there are charges attached, ” he said.

Similarly, a customer who wished to remain anonymous complained to Journalists on Saturday morning about the non-availability of cash at the ATM after visiting it along Oba Akran axis in Ikeja. He said he was lost as there was no POS provider available at the time.

Another bank customer, Mr. Femi Ayanwale, narrated his ordeal at Obafemi Awolowo Road in Ikeja, saying:

“The first person withdrew about 200,000 naira over 10 occasions using different ATM cards.

The second person collected about N200,000 three times while the third person before it got to my turn collected N200,000 two times, but wanted to collect another one before the machine ran dry. Right at the front of the bank, one of them wanted to sell it to another customer behind me who could not get anything.”

Ms. Chioma Johnson, a resident of Ogun state, lamented that there are no banks in her area and most people rely on PoS for banking transactions. These are the experiences of many other customers in Lagos and Ogun who relied on PoS for their banking transactions. They said they prefer to use banks as it is safer than mobile money providers where fraudsters can access customer information and withdraw from accounts.

In many Lagos suburbs, ATMs are mostly cashless and PoS operators can be found in small kiosks in front of or next to banks, providing cash for a fee if customers are unable to withdraw cash from the ATM.

With 3.73 million PoS terminals registered and 2.689 million in use in the country, PoS terminals originally intended for cashless transactions have been transformed into microbanks with signs on every street corner across the country.

Banking agents were introduced to fill the gap in non-bank areas, but even in bank areas, PoS operators have become ATMs.

As a result, some operators are now found working with merchants who either ask for cash or send money to PoS operators who charge a fee for the transaction.

Meanwhile, Prof. Tayo Bello, in an interview with correspondents yesterday, said most banks are unable to supply cash to their ATMs and do not have much cash to repair the machines and therefore can only supply a few machines. He attributed this to the Central Bank of Nigeria’s (CBN) cashless initiative to reduce cash in circulation to curb inflation.

He, however, was against operating PoS operators on bank premises, describing it as unethical and should be discontinued.

He called on the banks concerned to rectify this anomaly by restricting PoS operations outside the radius of their banking halls, as well as discharge their duties and responsibilities as expected.

In his opinion, Adebayo Adeleke, CEO and Chairman, Lancelot Ventures Limited, said, “It’s one way by which corruption is manifested at the base level. Ever wondered why you only have mint or fresh notes offered for sale at parties? The PoS saga is one sure way by which the banks frustrate the economic policies of the government.”