Nigeria’s banking landscape is undergoing a decisive structural shift, with 229 physical bank branches shut within a year as customers increasingly migrate to Point of Sale (POS) terminals and other electronic channels for everyday transactions.
Fresh data from the Central Bank of Nigeria (CBN) 2024 Financial Sector Statistical Bulletin indicate that the total number of Deposit Money Bank branches nationwide declined from 5,373 in 2023 to 5,144 in 2024, despite growth in the number of licensed banks from 33 to 35 during the same period.
The figures, which cover commercial, merchant and non-interest banks across the 36 states and the Federal Capital Territory (FCT), underline the accelerating move away from brick-and-mortar banking towards digital and agent-led platforms.
POS usage, in particular, has emerged as the dominant channel. Transaction volumes rose sharply from 9.85 billion in 2023 to 13.08 billion in 2024, representing a year-on-year increase of about 33 per cent. Even more striking was the value of POS transactions, which more than doubled to N223.27 trillion in 2024 from N110.35 trillion the previous year.
By contrast, growth in Automated Teller Machine (ATM) usage was modest. ATM transaction volumes edged up marginally from 1.01 billion to 1.02 billion, while transaction value increased by just over three per cent to N29.12 trillion.
Industry observers say the data confirm that POS terminals have become central to consumer payments, eclipsing both cash withdrawals and physical branch visits.
The contraction in bank branches, however, was uneven across the country. Lagos State retained its position as Nigeria’s banking hub with 1,521 branches in 2024, though this marked a decline of 11 branches from the previous year.
Ebonyi State recorded the steepest drop, losing 89 branches as its total fell from 120 to 31 within one year. Other states that saw notable reductions include Niger, which lost 32 branches; Oyo, down by 26; Ekiti and Ondo, each shedding 18; and Anambra and Ogun, which both lost eight branches.
The FCT also recorded a decline, with branch numbers falling from 400 to 391, signalling that closures are extending beyond rural areas into major commercial centres.
Not all states recorded declines. Delta added six new branches, Rivers gained eight, while Edo, Kaduna and Kano each recorded an increase of eight branches. Smaller gains were also seen in Katsina, Adamawa, Jigawa and Kogi, suggesting that banks are selectively expanding in areas with growing commercial activity and population density.
Analysts link the rapid rise in POS usage to a mix of structural factors, including cash scarcity episodes, the expansion of agent banking networks, mobile wallet adoption and the convenience of accessing financial services closer to homes and markets.
Customer behaviour has also been shaped by rising costs and service reliability concerns. A 2025 KPMG West Africa Banking Industry Customer Experience Survey noted that while trust remains critical, customers’ tolerance for failed transactions, delays and opaque charges is wearing thin, particularly among small and medium-sized enterprises.
The report observed that fintech operators continue to outperform traditional banks on speed, ease of use and reliability, positioning themselves not merely as alternatives but as primary channels for daily financial activity.
The surge in POS transactions came despite widespread complaints over rising charges. In December 2024, many POS agents doubled fees, charging as much as N200 per N5,000 withdrawal, as cash shortages persisted across bank ATMs.
In response to the cash crunch, the CBN sanctioned nine Deposit Money Banks with fines totalling N1.35 billion for failing to ensure cash availability through their ATMs during the festive season. Each bank was fined N150 million, with the penalties debited directly from their accounts with the apex bank.
