…Says all card issuers to deploy one ATM for every 7,500 payment cards issued

The Central Bank of Nigeria (CBN) has directed banks to immediately reverse failed automated teller machine (ATM) transactions, tightening rules aimed at improving consumer protection and reliability across the country’s payment infrastructure.

Under new Guidelines on the Operations of Automated Teller Machines in Nigeria, the apex bank said failed “on-us” ATM transactions, where a customer uses the ATM of their own bank, must be reversed instantly. Where an instant reversal fails due to technical issues or system glitches, banks are required to complete a manual reversal within 24 hours.

For failed “not-on-us” transactions, where a customer uses another bank’s ATM, the refund timeline must not exceed 48 hours. The guidelines also state that automated reversals for on-us transactions should occur in less than five minutes, while not-on-us transactions should be resolved in less than 15 minutes where automated systems function properly.

The CBN added that in cases where transaction failures arise from biometric mismatch or device errors, ATM operators must provide an immediate fallback to non-biometric verification where it is considered safe. Such events must also be logged for diagnostics while the stipulated refund timelines are maintained.

The new rules form part of a broader revision of Nigeria’s ATM operating framework as digital finance grows and cyber risks evolve.

“In exercise of the powers conferred on the Central Bank of Nigeria by Sections 2(d) and 47(2) of the CBN Act 2007 to promote efficient settlement systems, the Bank in June 2020 issued the Guidelines on Operations of Electronic Payment Channels in Nigeria,” the regulator said. “Since then, the payment ecosystem has witnessed developments such as increased sophistication in digital finance, cyber threats and financial inclusion.”

The updated guidelines replace the ATM provisions contained in the 2020 framework governing electronic payment channels, which also covered point-of-sale terminals, mobile POS systems and web payment acceptance services.

Beyond refund timelines, the regulator introduced new requirements for ATM deployment nationwide. All card issuers are required to deploy at least one ATM for every 7,500 payment cards issued. The requirement will be implemented gradually over three years, with banks expected to meet 30 percent of the threshold in 2026, 60 percent in 2027 and full compliance by 2028.

The Central Bank also directed that ATMs must be located within reasonable proximity to one another across both urban and rural areas, while deployment, relocation or decommissioning of machines must receive prior written approval from the regulator.

The guidelines also set operational and service benchmarks for ATM operators.

ATM downtime caused by technical faults must not exceed 72 consecutive hours. Where the downtime exceeds that threshold, customers must be properly notified by the deployer.

For biometric-enabled machines, operators are required to meet service level targets including a minimum authentication success rate of 98 percent measured monthly, transaction approval times of no more than 1.2 seconds at the 95th percentile, and system uptime of at least 99.5 percent excluding scheduled maintenance.

Operators must also ensure that helpdesk contacts are clearly displayed and functional at ATM terminals, while all charges and fees are fully disclosed to customers. Machines must provide receipts for transactions where requested by customers, except for balance inquiries, and the receipts must display key details including the transaction amount, terminal identity, date and time.

The regulator further directed that ATM screen displays and printed receipts must remain legible, while machines must be properly maintained to ensure efficient dispensing, deposit and recycling functions.

Banks and other deployers are required to maintain monitoring systems to identify the causes of failed transactions and to track cash levels within ATM vaults. Machines must be replenished regularly to prevent cash shortages and must not dispense unfit banknotes.

Cash availability at ATM terminals must be maintained at all times, with banks responsible for funding machines deployed by non-bank institutions through clearly defined service level agreements covering cash provisioning responsibilities.

Additional provisions require ATM operators to provide free personal identification number change functionality for customers, monitor and report suspicious transactions to the Central Bank, maintain backup power systems such as inverters to ensure uninterrupted service, and provide waste baskets at ATM locations for receipt disposal.

The Central Bank said the revised framework is designed to strengthen ATM service reliability, improve fraud monitoring, enhance security and ensure stronger consumer protection across Nigeria’s fast-growing digital payments ecosystem. (BusinessDay)

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