Nigeria’s banking landscape is undergoing a quiet but profound shift, as physical bank branches continue to disappear while Point of Sale terminals tighten their grip on daily financial transactions.
The data from the Central Bank of Nigeria’s 2024 Financial Sector Statistical Bulletin shows that deposit money banks shut down 229 physical branches within one year, reducing the total number of branches nationwide from 5,373 in 2023 to 5,144 in 2024. This contraction occurred even as the number of licensed banks increased from 33 to 35, underscoring how growth in the sector is no longer tied to brick-and-mortar expansion.
The figures cover branches and cash centres operated by commercial, merchant and non-interest banks across Nigeria’s 36 states and the Federal Capital Territory, revealing a system increasingly designed around electronic transactions rather than in-person banking.
At the centre of this transition is the explosive growth of POS usage. The volume of POS transactions jumped from 9.85 billion in 2023 to 13.08 billion in 2024, representing an increase of roughly 33 per cent within a single year. Even more striking was the surge in transaction value, which more than doubled from N110.35 trillion to N223.27 trillion over the same period.
This rapid rise confirms what many Nigerians, particularly small businesses and informal traders, already experience daily: POS terminals have become the most reliable and accessible gateway to financial services, far outpacing visits to bank branches or cash withdrawals from ATMs.
ATM usage did grow in 2024, but at a far slower pace. 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. The contrast highlights a payment system that is steadily shifting away from cash-based infrastructure towards agent-led and digital channels.
Branch closures, however, were uneven across the country. Lagos State remained Nigeria’s banking hub with 1,521 branches in 2024, despite losing 11 branches within the year. The state still maintained more than five times the number of branches in any other state, reflecting its continued dominance in commercial activity.
The sharpest contraction occurred in Ebonyi State, where branch numbers collapsed from 120 in 2023 to just 31 in 2024. Other states such as Oyo, Niger, Ekiti and Ondo also recorded notable declines, while the Federal Capital Territory lost nine branches, signalling that closures were not limited to rural or low-activity areas.
Some states bucked the trend, recording modest increases in branch numbers. Delta, Rivers, Edo, Kaduna, Kano and a handful of others saw expansions, suggesting that banks are now highly selective, following pockets of rising population density or commercial growth rather than pursuing nationwide physical coverage.
For MSMEs, traders and market-based businesses, this evolving structure has reinforced dependence on POS agents and fintech platforms for everyday transactions. Agent banking has become especially critical during periods of cash scarcity, when access to physical banks and ATMs proves unreliable.
This reality was starkly exposed in December 2024, when POS agents across the country doubled withdrawal charges, in some cases collecting up to N200 for a N5,000 withdrawal. Many bank ATMs were empty, and customers who managed to access cash inside banking halls were often restricted to withdrawals of N10,000 or N20,000, despite regulatory warnings.
The Central Bank later sanctioned nine banks with a combined fine of N1.35 billion for failing to ensure adequate cash availability through ATMs during the festive period, with penalties directly debited from the banks’ accounts.
Beyond infrastructure, customer expectations are also changing rapidly. According to the 2025 KPMG West Africa Banking Industry Customer Experience Survey, inflationary pressures have made Nigerians more sensitive to transaction charges, service reliability and security. As customers migrate to digital and POS channels, tolerance for failed transactions, delays and complex processes continues to decline.
The survey found that customer experience in the SME segment stagnated and declined slightly, driven largely by underperformance among traditional banks. Fintech platforms continued to outperform across key service metrics, reinforcing their position not just as alternatives, but as primary financial channels for daily economic activity.
Analysts link the dominance of POS systems to structural factors such as the expansion of agent banking networks, mobile wallet adoption, informal retail payments and the convenience of accessing financial services closer to homes and markets.
As Nigeria’s financial system evolves, banks are increasingly forced to rethink how they serve customers in an economy where physical presence is shrinking, digital trust is critical, and small businesses depend on speed, reliability, and proximity to survive.
