Nigeria’s banking industry shut 229 physical branches in one year as customers increasingly turned to Point of Sale terminals for their daily transactions.

This is according to the Central Bank of Nigeria’s 2024 financial sector statistical bulletin.

The data showed that the number of Deposit Money Bank branches across the country fell from 5,373 in 2023 to 5,144 in 2024, even as electronic payments, particularly through POS channels, surged sharply.

The statistics cover branches and cash centres of commercial, merchant and non-interest banks across the 36 states and the Federal Capital Territory.

The total number of licensed banks rose from 33 to 35 in 2024, yet the overall physical presence of banks shrank, underscoring how rapidly banking is migrating from brick-and-mortar to electronic platforms.

The data further revealed that POS terminals are increasingly becoming the preferred alternative to walking into a banking hall.

The volume of POS transactions jumped from 9.85bn in 2023 to 13.08bn in 2024.

This represents an increase of about 3.23bn transactions, or roughly 33 per cent year on year.

More striking was the surge in the value of POS transactions, which more than doubled.

The value rose from N110.35tn in 2023 to N223.27tn in 2024, an increase of about N112.93tn or 102 per cent.

ATM usage also rose, but at a much slower pace compared to POS.

ATM transaction volumes increased from 1.01bn in 2023 to 1.02bn in 2024, representing less than one per cent growth.

The value of ATM transactions rose from N28.21tn to N29.12tn, an increase of about N909bn or just over three per cent.

The figures underline a clear reality that POS terminals are now far more central to consumer payments than cash withdrawals at machines or visits to physical branches.

The contraction in branch networks was not evenly spread across the country.

Lagos State, which remains Nigeria’s banking hub, still accounted for the highest number of branches with 1,521 in 2024.

However, the state also recorded a decline of 11 branches, down from 1,532 in 2023.

Despite this, Lagos continued to dwarf all other states, with more than five times the number of branches than any other state.

Ebonyi State recorded the single largest decline nationwide, losing 89 branches in one year. The number of branches in the state crashed from 120 in 2023 to just 31 in 2024.

Oyo, Niger, Ekiti and Ondo also recorded sizeable contractions. Oyo State lost 26 branches, bringing the total to 200.

Niger State saw a 32-branch decline, from 108 in 2023 to 76 in 2024.

Ekiti State recorded a reduction of 18 branches, from 83 to 65, while Ondo State also dropped by 18 branches from 127 to 109.

Other states that saw meaningful closures included Anambra and Ogun, with each losing eight branches. Cross River lost five, and Plateau lost seven branches.

The Federal Capital Territory also shed nine branches, bringing the total to 391 in 2024, down from 400 the previous year, further signalling that closures were not limited to rural or semi-urban areas but were occurring even in major population and commercial centres.

Not all states experienced shrinking bank footprints. Some areas recorded increases in the number of branches.

Delta State added six new branches, rising from 182 to 188. Rivers State increased from 272 to 280. Edo, Kaduna and Kano each gained eight additional branches in the year. Katsina added three, Adamawa and Jigawa added two each, while Kogi gained one.

These increases suggest that branch expansion now tends to follow areas with rising commercial activity or population growth, even while the national total continues to fall.

Banks and their customers in Nigeria are now operating within what has become a rapidly changing financial system, where new regulations and technological adoption are forcing lenders to rethink how services are designed and delivered.

At the same time, persistent inflationary pressures mean customers are increasingly sensitive to bank charges, reliability issues, and transaction security, according to the latest 2025 KPMG West Africa Banking Industry Customer Experience Survey.

The KPMG report notes that as more Nigerians migrate from physical branches to digital channels and POS terminals, expectations around speed, transparency and problem resolution have risen sharply.

While trust and integrity remain the strongest factors shaping public confidence in banks, the survey found that patience with failed transactions, delays, and complex service processes is declining.

It added, “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.”

Financial sector analysts have long linked the rise in POS usage to several structural shifts.

These include cash scarcity episodes, widening agent banking networks, mobile wallet adoption, the growth of informal retail payments, and the convenience of accessing financial services closer to homes and markets rather than visiting a formal branch.

The KPMG report further noted, “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.”

Sunday PUNCH observed that the surge in POS transactions occurred despite the arbitrary increase in charges common towards the end of the year.

In December 2024, POS agents hiked charges by about 100 per cent, collecting up to N200 per N5,000 withdrawal.

Many Nigerians were at the mercy of POS operators as most banks’ ATMs were empty.

Inside the banks, there was no reprieve as most turned customers away for lack of cash, and in rare cases where customers were able to get cash, they were limited to N10,000 or N20,000 withdrawals.

This happened despite the CBN’s warning to banks that any bank found not dispensing cash via ATMs would be sanctioned.

The CBN earlier sanctioned nine Deposit Money Banks with fines totalling N1.35bn for failing to ensure cash availability via Automated Teller Machines during the festive season.

Each of the banks was fined N150m following spot checks that revealed non-compliance with the apex bank’s cash distribution guidelines.

The affected banks include Fidelity Bank Plc, First 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.

The fines will be directly debited from the banks’ accounts with the CBN. (Sunday PUNCH)

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