How banks, POS operators collude to worsen Nigeria’s cash scarcity

At the heart of Kubwa, the Federal Capital Territory, Abuja, on Saturday, a point of sale (PoS) operator withdrew tons of cash from an automated teller machine (ATM) installed by Access Bank.

The PoS operator had seven different ATM cards from Access Bank, United Bank for Africa (UBA), Zenith Bank, Eco Bank, Guaranty Trust Bank (GTB), First Bank and Fidelity Bank.

Intending users of the ATM facility yelled at him as he nearly exhausted all the money on the machine. He exited the ATM facility after using three ATM cards, waiting to withdraw cash from another machine.

“That is their way, POS operators,” said a woman who had been waiting to withdraw cash.

READ ALSO: After Economy Post stories, CBN sets up panel to investigate loans to banks’ insiders

“They have cards from different banks and they move from one ATM to another,” she added.

This has become the primary assignment of POS operators since the cash crunch of early 2023. They move from one ATM to another, withdrawing all the cash from the machines and selling them to their customers.

Cost of money

Economy Post‘s findings show that the POS operators charge N100 for N5,000, and N200 for N10,000 withdrawal. Those who wish to withdraw N20,000 pay N400. Several Nigerians have lost hope in banks and placed them on POS operators who are always ready to give them as much as they want.

Okeke Obi is one of such individuals. He is a trader at Oshpdi Market in Lagos and withdraws up to N300,000 from POS operators each day.

“I do a lot of transactions with POS operators because they can get you as much money as you need in the twinkling of an eye,” he said.

READ ALSO: Again, managers take loans from Zenith Bank at 4% interest despite rising benchmark rate

“However, I spend up to N5,000 to N7,000 every day to do those transactions,” he revealed.

POS operators and banks’ collusion

Elizabeth Sharon-Brown operates a small shop in Ikorodu, Lagos. However, she has access to huge cash from N10,000 to N5 million. She has insiders in three deposit money banks who give her any amount of money she needs even if that means denying legitimate bank customers of cash.

“If you want to succeed in the business, you need to have a deal with bank workers who will be getting some cash for you,” she said.

“They will charge you, but the advantage is that you will never lack cash.”

Sharon-Brown is not the only one in this business. All the three PoS operators interviewed by Economy Post said they had people inside banks who would always give them cash.

It was found that some of the bank workers have opened POS centres where they occasionally send cash from their banks. Others simply have cash reserved for their customers or relatives in POS business.

READ ALSO: Banks’ interest rates are impoverishing Nigerians

EFCC knows this for fact

The Executive Chairman of the Economic and Financial Crimes Commission (EFCC), Mr. Ola Olukoyede, is aware of this fact.

In a post made by the EFCC on X, formerly known as Twiter, on Saturday, the EFCC chairman said that illegal dealings and trading in naira with POS operators must stop, stressing that the collusion was causing more harm than good on the Nigerian economy.

“What we notice and see around lately is that Nigerians can only withdraw a small amount of their money with the banks in Automated Teller Machine (ATMs) but POS operators evidently go around with huge amounts of money gotten from the banks. This is not fair to Nigerians and we must fight it head-on,” he said.

Cash still being hoarded

There is a lot of money outside the banking system. A money and credit statistics data from the Central Bank of Nigeria (CBN) estimated currency in circulation in the first quarter of 2024 at N3.87 trillion, Nairametrics reported. However, currency outside banks was N3.63 trillion in the same period.

Currency outside banks has surged from N1.45 trillion in 2023 to a whipping N3.63 trillion in 2024, representing an increase of 150.34 percent over the period.


“One major reason why there is so much cash outside the banks is lack of confidence in the country’s financial system,” said a financial expert and Chief Executive of Financial Algorithm, Dr Paul Odoma.

READ ALSO: In 11 years, Nigerians collected $59bn from banks for foreign trips – CBN

“For the first time, Nigerians saw how cash was limited in the first quarter of 2023. Families suffered as they could not buy or make transactions. So, this time, people are mopping up cash in case this kind of policy returns,” Dr Odoma added.

An individual cannot withdraw more than N20,000 per day from a bank.

This has made cash unavailable to households but more cash to POS operators.

Huge POS transactions in Nigeria

Data from the Nigeria Inter-Bank Settlement System Plc (NIBSS) show that electronic payment transactions in Nigeria jumped by 55 percent to N600 trillion in 2023, from N387 trillion reported in 2022.

The POS transactions for 2023 was N10.73 trillion as against N8.39 trillion in 2022 representing a 27.85 percent increase.

Total value of POS transactions in the first quarter (Q1) of 2024 was N2.62 trillion, as against N2.84 trillion reported in the corresponding period of 2023. In Q1 of 2024, the number of registered POS terminals increased from 3,441,287 in January 2024 to 3,730,441 by March 2024, according to the NIBBS.

“The more the number of POS terminals, the more the demand for money in banks and the more is currency outside the banks likely to increase. So, the real solution is to monitor and regulate the industry,” said a Lagos-based currency expert, Mr Obidi Ifediba.

Yakubu Ibrahim
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