Nigeria’s banking landscape is quietly but steadily being reshaped. Across cities and smaller towns alike, physical bank branches are disappearing, while Point of Sale (POS) terminals are becoming the most visible face of everyday financial transactions. New data from the Central Bank of Nigeria (CBN) shows how sharply consumer behaviour has tilted toward electronic and agent-led banking, forcing lenders to rethink their traditional brick-and-mortar strategies.
Fewer Branches Despite More Banks
Even as the number of licensed banks in Nigeria increased from 33 to 35 in 2024, the industry’s physical footprint shrank. According to the CBN’s 2024 Financial Sector Statistical Bulletin, Deposit Money Banks closed 229 branches within one year, reducing the total number of branches nationwide from 5,373 in 2023 to 5,144 in 2024.
The figures cover branches and cash centres operated by commercial, merchant and non-interest banks across all 36 states and the Federal Capital Territory (FCT). The contradiction is striking: more banks are operating in the system, yet fewer physical locations are available to customers. This trend highlights how rapidly banking services are migrating away from banking halls toward electronic platforms and agent networks.
POS Transactions Surge Past Traditional Channels
At the heart of this shift is the explosive growth of POS transactions. The CBN data shows that the volume of POS transactions jumped from 9.85 billion in 2023 to 13.08 billion in 2024—an increase of about 3.23 billion transactions, or roughly 33 per cent year on year.
Even more dramatic was the growth in value. POS transaction value more than doubled, rising from ₦110.35 trillion in 2023 to ₦223.27 trillion in 2024. This represents an increase of ₦112.93 trillion, or 102 per cent, in just one year.
By comparison, growth in ATM usage was modest. ATM transaction volumes rose marginally from 1.01 billion to 1.02 billion transactions, while the value increased from ₦28.21 trillion to ₦29.12 trillion—just over three per cent growth. The contrast underscores a clear reality: POS terminals are now far more central to consumer payments than cash withdrawals at ATMs or visits to physical branches.
Uneven Branch Closures Across States
The contraction in branch networks was not evenly distributed across the country. Lagos State, Nigeria’s financial and commercial hub, still had the highest number of branches at 1,521 in 2024. However, even Lagos recorded a decline, losing 11 branches from its 2023 total of 1,532. Despite this drop, Lagos continued to dwarf all other states, with more than five times the number of branches found in any single state.
Ebonyi State recorded the most dramatic decline nationwide. Its number of bank branches collapsed from 120 in 2023 to just 31 in 2024, a loss of 89 branches in one year. Other states also saw notable contractions. Oyo State lost 26 branches, bringing its total to 200. Niger State shed 32 branches, falling from 108 to 76. Ekiti and Ondo states each lost 18 branches, while Anambra and Ogun recorded declines of eight branches apiece.
The closures were not confined to rural or semi-urban areas. The Federal Capital Territory also lost nine branches, dropping from 400 in 2023 to 391 in 2024. This suggests that even major population and commercial centres are being affected by the industry-wide pullback from physical banking locations.
Pockets of Expansion Remain
Despite the overall decline, some states bucked the national trend. Delta State added six branches, increasing its total from 182 to 188. Rivers State grew from 272 to 280 branches. Edo, Kaduna and Kano states each recorded an increase of eight branches during the year.
Katsina added three new branches, Adamawa and Jigawa added two each, while Kogi gained one. These increases suggest that banks are now far more selective about expansion, focusing on areas with rising commercial activity, population growth or strategic importance, even as the national branch count continues to fall.
Customers Demand More as Digital Use Grows
The move away from physical branches is happening alongside rising customer expectations. According to the 2025 KPMG West Africa Banking Industry Customer Experience Survey, persistent inflation and economic pressure have made customers more sensitive to bank charges, service reliability and transaction security.
As Nigerians increasingly rely on digital channels and POS terminals, patience with failed transactions, delays and complex service processes is wearing thin. While trust and integrity remain central to public confidence in banks, the survey notes that expectations around speed, transparency and issue resolution have risen sharply.
KPMG observed that customer experience in the SME segment remained largely stagnant, with a marginal decline compared to the previous year. Fintech players such as OPay and Moniepoint continued to post gains, but these were not enough to offset the broader downturn driven by traditional banks. Structural constraints, the report noted, continue to limit the ability of banks to respond quickly to the evolving needs of small and medium-sized businesses.
Fintechs Cement Their Role in Daily Payments
Analysts have long linked the rise in POS usage to deeper structural shifts within Nigeria’s financial system. These include repeated cash scarcity episodes, the rapid expansion of agent banking networks, growing mobile wallet adoption, and the convenience of accessing financial services closer to homes and markets rather than travelling to a formal branch.
KPMG noted that even as the CBN intensified compliance oversight following onboarding pauses in 2024, fintech companies continued to anchor everyday payments, savings, credit and agency banking. Expanded POS networks and mobile wallets have entrenched fintechs not just as alternatives to banks, but as primary channels for daily financial interactions.
Across key measures of customer experience—particularly time, effort and expectations—fintech platforms continue to outperform traditional banks, with customers associating them with faster processing, more reliable uptime and simpler mobile interfaces.
POS Growth Persists Despite Rising Charges
The surge in POS transactions occurred despite sharp increases in charges, especially toward the end of the year. In December 2024, many POS agents doubled their fees, charging as much as ₦200 for a ₦5,000 withdrawal.
For many Nigerians, there was little choice. Bank ATMs were largely empty, and customers who entered banking halls were often turned away due to cash shortages. In the few cases where cash was available, withdrawals were typically capped at ₦10,000 or ₦20,000.
This situation persisted despite warnings from the CBN that banks failing to dispense cash through ATMs would face sanctions.
CBN Sanctions Banks Over Cash Shortages
In response to widespread non-compliance during the festive season, the CBN sanctioned nine Deposit Money Banks, imposing fines totalling ₦1.35 billion. Each bank was fined ₦150 million following spot checks that revealed failures to meet cash availability guidelines.
The affected banks were Fidelity Bank, First Bank, Keystone Bank, Union Bank, Globus Bank, Providus Bank, Zenith Bank, United Bank for Africa and Sterling Bank. The apex bank directed that the fines be debited directly from the banks’ accounts with the CBN.
Together, the figures and enforcement actions paint a clear picture of a banking system in transition—one where physical branches are steadily giving way to digital channels, even as regulators and customers grapple with the challenges that come with this transformation.