Nigerians are set to experience a major shift in ATM transaction costs as the Central Bank of Nigeria (CBN) rolls out new withdrawal charges. Gone are the days when customers could enjoy three free withdrawals on other banks’ ATMs. Starting March 1, 2025, every cash withdrawal outside a customer’s own bank will come at a cost.

The new policy, outlined in a circular signed by the CBN’s Acting Director of Financial Policy and Regulation, John Onojah, reflects the banking sector’s rising operational expenses and the need for efficiency in ATM services. As digital banking continues to expand, the CBN is steering the country toward a cashless economy, but not without some financial adjustments for account holders.

Under the revised guidelines, here are four key things to note:

1. On-Us transactions (same bank’s ATM): Same bank’s ATM transactions remain free. Customers using their bank’s ATM will not pay any withdrawal fees.

2. On-site ATMs (within bank premises): On-site ATM withdrawals cost N100 per N20,000. This applies to machines located inside bank premises.

3. Off-site ATMs (outside bank premises): Off-site ATM withdrawals attract a higher charge. Customers using ATMs outside bank premises will pay N100 per N20,000 plus an additional surcharge of up to N500.

4. International withdrawals will vary: The charges will depend on the international acquirer’s fees.

The biggest change is the total removal of free monthly withdrawals on ATMs belonging to other banks. Each withdrawal on another bank’s ATM now carries a charge, making cash access more expensive for those without easy access to their bank’s machines.

The CBN has cited rising operational costs and the urgent need to improve ATM services across Nigeria as the driving forces behind this policy shift. Banks have long argued that maintaining and restocking ATMs comes at a high cost, especially as more Nigerians embrace electronic banking. The new charges are expected to push financial institutions to deploy more ATMs, ensuring better accessibility for customers.

A closer look reveals that this move is not just about cost recovery, it is also about shaping banking behaviour. Digital transactions are on the rise, and cashless policies remain a priority for the CBN. With higher ATM charges, customers may find digital payment options more attractive, reducing dependence on cash transactions.

For everyday banking customers, the new charges mean rethinking how money is withdrawn and spent. Frequent ATM users may start prioritising digital transactions or planning cash withdrawals more strategically to avoid extra costs.

Small business owners and traders who rely heavily on cash may feel the impact more than others. Many operate in locations where their bank’s ATM is not always available, meaning higher withdrawal costs. As a result, some may consider switching to mobile banking, POS terminals, or bank transfers to cut down on expenses.

The CBN’s decision may not be welcomed by all, but it signals a clear direction for Nigeria’s banking future. The era of free ATM withdrawals is over, and account holders must adjust their banking habits to avoid unnecessary charges. As the deadline approaches, financial literacy will play a crucial role in helping Nigerians navigate these changes and make informed decisions about their money.

For now, one thing is certain: cash withdrawals just got more expensive, and every naira spent at the ATM will count more than ever.