The Rise of POS Agents as Nigeria’s New Cash Bank

While regulators focus on building stronger, better-capitalised banks, millions of Nigerians are quietly grappling with a more basic problem: how to access their own cash. As ATMs run dry and POS kiosks fill the gap at a cost, a parallel cash economy is reshaping everyday banking in Nigeria, writes Festus Akanbi

Nigeria’s banking conversation is currently dominated by the Central Bank of Nigeria’s push for stronger, better-capitalised banks. The recapitalisation drive is framed as a foundation for stability and resilience, and as part of the ambition to build a $1 trillion economy. Yet, running parallel to this regulatory focus is a quieter but more intimate anxiety among bank customers: the growing difficulty of accessing their own cash through banks’ traditional channels, particularly automated teller machines, and the gradual outsourcing of this core banking function to point-of-sale operators.

This tension between balance sheet strength and service delivery has become increasingly visible in everyday life.

Social media critic, Mimj Yakigar, captured a widespread sentiment when she asked, “When exactly did POS replace ATMs in Nigeria? Nobody introduced it to us. It just happened.”

Her observation reflects not a sudden policy shift but a gradual consumer adaptation to repeated service failures. ATMs were designed to embody a simple promise of banking: your card, your money, instant access, with no intermediary. Over time, that promise weakened under the weight of persistent network errors, debits without cash, delayed reversals, and layered charges. As these frictions became routine rather than exceptional, an alternative channel filled the gap.

Point-of-sale terminals were originally introduced as payment tools to help merchants accept electronic payments. Their evolution into cash-dispensing points was not driven by formal design but by necessity.

As Yakigar noted, POS did not rise because it was inherently superior to ATMs but because “the system started failing, not once, not twice, but consistently.” In this sense, the growth of POS cash withdrawals is less a story of innovation than one of adaptation within a stressed system.

Shifting to POS

Ironically, the same banks that issue ATM cards are also at the centre of POS expansion, either directly or through fintech partnerships. This has created a peculiar outcome in which customers increasingly pay a premium to access funds already held within the formal banking system.

In markets and neighbourhood kiosks across the country, cash has itself become a commodity. A customer seeking N10,000 may be charged N 10,500 or more, depending on location, timing, and availability. What emerges is a parallel cash economy operating alongside regulated banking, where money is no longer withdrawn but effectively resold.

The CBN does not dispute the continuing importance of cash. Speaking at the 2026 Committee of Heads of Bank Operations conference in Lagos, Governor Olayemi Cardoso, represented by his adviser Fatai Karim, stated clearly that “cash remains king.” According to the CBN, ATMs and POS terminals together increased cash circulation by 4.6 per cent in 2025, underscoring their role in stabilising cash distribution. Cardoso emphasised that while electronic transactions have grown rapidly, they cannot fully replace cash, particularly in rural and informal settings. Electronic payment volumes rose by 276 percent over five years, with transaction values increasing by 581 percent, yet physical cash remains essential for inclusion.

Industry leaders echo this dual reality. Pius Olanrewaju, president of the Chartered Institute of Bankers of Nigeria, noted that although electronic transactions exceeded 60 billion in 2025, cash remains vital for low-value transactions in informal and rural areas.

Chairman of the Committee of Heads of Bank Operations, Abraham Aziegbe, noted that ATM withdrawals totalled N36.34 trillion in the first half of 2025, underscoring Nigerians’ continued reliance on cash even amid digital growth. These figures suggest that demand for cash has not disappeared; rather, access to it has shifted.

On the ground, that shift is unmistakable. In markets like Mile 12 in Lagos, customers now instinctively ask for the nearest POS operator rather than an ATM. A 35-year-old lawyer, Zainab Okosun, described how she paid N2,400 in charges to withdraw N80,000 from a POS operator after struggling with ATM queues in the past. Her experience reflects a broader pattern: ATMs that are “temporarily unable to dispense cash,” machines disabled in the evenings or on weekends, and long queues that make POS withdrawals, even at a premium, the more predictable option.

The Pressure

Banks cite several pressures behind this trend. According to POS aggregators like Tinuke Adebola, ATM operations have become increasingly expensive and stressful. Power supply, security, cash movement, foreign exchange constraints, inflation, and policy uncertainty all add to costs, while ATM usage does not always generate commensurate profit.

In a profit-driven system, banks have little incentive to expand or even maintain extensive ATM networks. POS operators, by contrast, operate flexible, decentralised models, sourcing cash locally and passing costs directly to customers.

Data from the Nigeria Inter-Bank Settlement System illustrates the scale of this transformation. As of August 2024, Nigeria had over 26.5 million registered PoS terminals, processing trillions of naira in transactions. Fintech firms such as Moniepoint, PalmPay, and OPay dominate this space. At the same time, the Association of Mobile Money and Bank Agents of Nigeria estimates that the sector has created over two million jobs. From a financial inclusion perspective, this expansion fills real gaps, especially in over 300 local government areas without bank branches.

However, inclusion through intermediaries comes with trade-offs. Charges are unregulated and vary widely by location, from modest fees in densely populated areas to steep premiums in high-brow neighbourhoods or cash-scarce communities. As Yakigar observed, this normalises a system in which people pay for the privilege of accessing their own money. Over time, this risk reshapes economic expectations, particularly among young Nigerians who may come to see “selling money” as a standard form of entrepreneurship.

The recapitalisation debate intersects with this reality in important ways. As Alliance Law Firm has noted, increased bank recapitalisation strengthens balance sheets and regulatory resilience but does not automatically translate into better customer service, lower fees, or improved access. Larger, better-capitalised banks may even reduce competition, creating institutions that are stable yet distant from everyday consumer needs. In such a context, the outsourcing of cash access to PoS agents can be seen as a rational response by banks, but also as a signal of service lag rather than technological progress.

The CBN has acknowledged these complexities, indicating that it is reviewing policies such as the ratio of bank-issued cards to ATMs. Cardoso has stressed that cash availability depends not only on currency issuance but also on logistics, infrastructure, incentives, and coordination among institutions. His framing of the future of money as both physical and digital suggests recognition that balance, rather than replacement, is the goal.

Ultimately, the rise of POS as the primary source of cash access in Nigeria does not mean ATMs have become obsolete. It reveals a system in which service delivery has struggled to keep pace with demand, and adaptation has filled the gaps.

As Yakigar concluded, “POS did not replace ATM; it exposed a system where money is sold, not served.” The challenge for regulators and banks alike is to ensure that strengthening the financial system’s foundations does not come at the expense of its most basic promise: reliable, affordable access to one’s own money.