In a single year, Nigeria’s banking sector closed 229 physical locations as more consumers relied on Point of Sale (POS) terminals for everyday transactions. The Central Bank of Nigeria‘s 2024 Financial Sector Statistical Bulletin supports this.
Despite a sharp increase in electronic payments, especially through POS channels, the number of Deposit Money Bank branches nationwide decreased from 5,373 in 2023 to 5,144 in 2024. Commercial, merchant, and non-interest bank branches, as well as cash centres, are included in the statistics across all 36 states and the Federal Capital Territory. The overall physical presence of banks decreased in 2024, despite the total number of licensed banks increasing from 33 to 35, highlighting the speed at which banking is shifting from physical to electronic platforms.
The data also showed that using POS terminals instead of going into a banking hall is becoming more and more popular. POS transaction volume increased from 9.85 billion in 2023 to 13.08 billion in 2024. This is an increase of roughly 33% year over year, or 3.23 billion transactions.
The increase in POS transaction value, which more than doubled, was more remarkable. The value increased by roughly N112.93 trillion, or 102%, from N110.35 trillion in 2023 to N223.27 trillion in 2024.
The use of ATMs increased as well, although much more slowly than POS. ATM transaction volumes grew by less than 1%, from 1.01 billion in 2023 to 1.02 billion in 2024. The value of ATM transactions increased by roughly N909 billion, or slightly more than three percent, from N28.21 trillion to N29.12 trillion.
The numbers make it abundantly evident that POS terminals are now far more important to customer payments than cash withdrawals at ATMs or in-person branch visits. The nation was not equally affected by the branch network contraction.
With 1,521 branches in 2024, Lagos State, which continues to be Nigeria’s banking centre, continued to have the most. However, from 1,532 in 2023, the state also saw a drop of 11 branches. Lagos still has more than five times as many branches as any other state, despite this, BrandSpur banking and finance news desk reports.
With 89 branches lost in a single year, Ebonyi State saw the biggest decline in the country. The state’s branch count plummeted from 120 in 2023 to just 31 in 2024. Significant contractions were also observed in Oyo, Niger, Ekiti, and Ondo. With the loss of 26 branches, Oyo State now has 200. The number of branches in Niger State decreased by 32, from 108 in 2023 to 76 in 2024.
There were 18 fewer branches in Ekiti State (from 83 to 65) and 18 fewer branches in Ondo State (from 127 to 109). Anambra and Ogun were two other states that experienced significant closures, each losing eight branches. Plateau lost seven branches, while Cross River lost five.
Additionally, the Federal Capital Territory closed nine branches, reducing the total to 391 in 2024 from 400 the year before. This further suggests that closures were taking place in major commercial and population centres as well as rural and semi-urban areas. Bank footprints shrank in some states but not in others. The number of branches increased in some places.
Delta State increased its number of branches from 182 to 188 by adding six new ones. Rivers State went from 272 to 280. Throughout the year, Edo, Kaduna, and Kano each saw an increase of eight branches. Kogi gained one, Adamawa and Jigawa each added two, and Katsina added three. These increases imply that, even though the national total is still declining, branch expansion now typically follows regions with increasing commercial activity or population growth.
Nigerian banks and their clients now operate in a financial system that is rapidly evolving, with new rules and the uptake of technology compelling lenders to reconsider how services are created and provided.
According to the most recent KPMG West Africa Banking Industry Customer Experience Survey from 2025, consumers are becoming more sensitive to bank fees, dependability concerns, and transaction security due to ongoing inflationary pressures. Its expectations regarding speed, transparency, and problem-solving have significantly increased as more Nigerians switch from physical branches to digital channels and POS terminals.
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According to the survey, people’s tolerance for delayed transactions, complicated service procedures, and unsuccessful transactions is waning, even though trust and integrity continue to be the main determinants of public confidence in banks.
Futhering, the survey revealed: “Customer experience in the SME segment remained largely stagnant, recording a marginal decline compared to last year. While fintech leaders such as OPay and Moniepoint continued to post gains, these improvements were not enough to offset the broader downturn.
“The overall decline was driven primarily by traditional banks, whose average customer experience performance fell, underscoring persistent structural constraints that limit their ability to effectively respond to the evolving needs of SMEs,” it added.
Analysts in the financial sector have long connected a number of structural changes to the increase in POS usage. These include periods of cash scarcity, the expansion of agent banking networks, the use of mobile wallets, the rise in unofficial retail payments, and the ease of obtaining financial services near homes and markets as opposed to going to a formal branch.
The KPMG report went on to say: “While the Central Bank of Nigeria intensified compliance oversight following the 2024 onboarding pauses, fintechs have continued to anchor everyday payments, savings, credit and agency banking.
“Expanded POS networks and mobile wallets have further entrenched their relevance in daily financial activity, positioning fintechs not just as alternatives to banks, but as primary channels for daily financial interactions.
“Across the Six Pillars of customer experience, fintechs continue to outperform traditional banks, particularly on Time & Effort and Expectations. Customers consistently associate fintech platforms with fast transaction processing, reliable uptime and intuitive mobile interfaces,” it added.
Despite the arbitrary increase in charges that is typical towards the end of the year, it was noticed that there was a surge in POS transactions. POS agents increased fees by roughly 100% in December 2024, earning up to N200 for every N5,000 withdrawal. Since most banks’ ATMs were empty, many Nigerians were left to rely on POS operators.
There was no respite inside the banks, as the majority turned away clients who didn’t have enough money, and when they did, their withdrawals were restricted to N10,000 or N20,000. This occurred in spite of the CBN’s warning to banks that they would face sanctions if they were discovered not to be dispensing cash through ATMs.
Nine Deposit Money Banks were previously fined N1.35 billion by the CBN for neglecting to guarantee cash availability through automated teller machines during the holiday season. Following spot checks that showed non-compliance with the apex bank’s cash distribution guidelines, each bank was fined N150 million.
First Bank Plc, Fidelity Bank Plc, Keystone Bank Plc, Union Bank Plc, Globus Bank Plc, Providus Bank Plc, Zenith Bank Plc, United Bank for Africa Plc, and Sterling Bank Plc are among the impacted financial institutions. The banks’ CBN accounts will be immediately debited for the fines.
