POS operators blame banks for 100% hike in transaction fees

Point of sale (POS) operators in Abuja and Lagos have increased transaction fees due to difficulties getting cash from banks.

By implication, customers would incur higher charges to access money as the yuletide draws near.

In the past few weeks, there have been media reports of cash shortages in banks in some parts of the country as financial institutions ration withdrawals.

On November 2, the Central Bank of Nigeria (CBN) refuted the reports, saying there was sufficient cash for economic activities.

The apex bank said the “seeming scarcity of cash” experienced in some locations was due to the high volume of withdrawals from its branches by banks and panic withdrawals by customers from automated teller machines (ATMs).

But the recent struggles of agent bankers, which have led to a hike in fees, counters the regulator’s position.

TheCable observed on Monday that POS operators inflated charges by 100 percent in the federal capital territory (FCT), citing challenges with obtaining cash from banks.

Chioma Martina, an agent banker in Duste, Abuja, described the situation as “stressful and challenging.”

She said banks have limited access to cash from the CBN, forcing them to ration and limit withdrawals.

The situation, she said, is forcing POS operators to seek alternative sources of cash — often at a premium.

“There has been naira scarcity since Monday last week,” Martina said.

“As at Friday last week, Zenith bank was only giving N10,000, GTB gives N20,000, while Access was sending customers away claiming they do not have cash.

“We have to inflate our rates because we have started buying cash. Sometimes I have to go to colleagues or sellers in the market who would like to deposit their cash. So we collect their money and pay them.”

Asked why she thinks cash is scarce, Martina said banks had said they also do not have access to cash from the central bank.

“What they (banks) told us is that they do not get enough cash from the CBN, so we can only get access to the little they have. So, most times, we have to collect from people to sustain our business because what we get from banks is never enough,” she said.

“The mental stress of getting the cash is the most annoying thing because we have to beg to get cash. We (operators) have to be careful of who we get money from because if you get fake notes that will bring tears.

“For me, I have a customer who gives me cash and any little he has, even if it is N30,000, I collect and pay him for it.”

Although Martina refused to disclose the amount she pays to get cash, other POS points visited had the same complaints.

“We cannot even say this is exactly where the problem is from,” another operator to TheCable.

“All we know is neither the federal government nor the CBN has come to announce that there is cash scarcity but the banks have refused to give us cash or access to our money like we want.”

POS operators in some parts of Lagos also are enmeshed in a similar situation.

Enilat, an agent banker in Ikorodu, said she has been struggling for days to access cash, hence the increase in her fees for all transactions.

In Satellite Town, a POS operator, identified as Priscilla, said her banks now give customers “N20,000 per day”. To cope, the agent banker now uses different ATM cards to withdraw from various banks.

Speaking on the issue, Chimeze, another POS operator, blamed the increment on charges on the rationing of cash by banks.

“If you want to collect N5,000, I’ll charge N200 and for N20,000, I’ll charge N700,’’ he said.

“Cash is scarce and banks are not letting us withdraw in bulk like before.”

It was observed that operators in Abuja and Lagos now charge between N150 to N200 for N4,000 or less; N300 to N400 for amounts from N5,000; N500 to N600 for N10,000, while a fee ranging from N800 to N1,000 is charged for cash withdrawals of N20,000 upwards.

BANKS LIMIT CASH WITHDRAWALS

To verify the claims of POS operators regarding cash scarcity, the reporter visited banks in Abuja.

At the United Bank of Africa (UBA) in Kubwa, most customers were found making deposits but over-the-counter withdrawals were limited to a meagre N10,000.

The same was the case at Heritage Bank in Maitama. A bank official confirmed that last week, customers could withdraw up to N50,000 over the counter. However, this week, the maximum withdrawal limit has been reduced to just N20,000.

Efforts to obtain official comments from the banks regarding the reasons behind the cash scarcity were unsuccessful.

‘INDIVIDUALS HOARDING CASH… WE’LL ADDRESS IT’

In an interview with TheCable on Wednesday, Sidi Ali, CBN’s acting director of corporate communications, attributed the current situation to the ongoing hoarding by some individuals.

She said the apex bank will address the cash scarcity concerns of Nigerians at the next meeting of the bankers committee.

Alis said the currency in circulation has risen from N1 trillion in March 2023, to N3.4 trillion as at December 11.

“So, you see there’s cash out there and CBN is really issuing to banks. Except that most of this cash is in the hands of individuals,” she said.

According to Ali, “hoarding and panic withdrawals are ongoing”, hence the sensitisation exercise conducted by the CBN to encourage the public to bring out the cash so that transactions can be done seamlessly.

Reporting by Busola Aro and Bunmi Aduloju.