CBN Orders Banks to Refund Customers for Failed ATM Transactions Within 48 Hours
By Joseph Iyaji | Akahi News
In a sweeping move to strengthen consumer protection and rebuild public confidence in the financial system, the Central Bank of Nigeria (CBN) has directed Deposit Money Banks (DMBs) and other financial institutions to refund customers for failed Automated Teller Machine (ATM) transactions within 48 hours.
The directive, contained in a new draft guideline titled “Exposure of the Draft Guidelines on the Operations of Automated Teller Machines in Nigeria,” was released by the apex bank on Thursday. The document, signed by Musa I. Jimoh, Director of the Payments System Policy Department, was circulated to banks, payment service providers, card schemes, and independent ATM deployers, inviting feedback from stakeholders before October 31, 2025.
Swift Refunds and Automated Reversals
According to the draft policy, the CBN mandates instant reversals for failed “on-us” transactions — those performed at a customer’s own bank ATM. However, where technical hitches prevent immediate reversal, banks must ensure the funds are manually refunded within 24 hours.
For transactions involving other banks’ ATMs (known as “not-on-us” transactions), refunds must be processed within 48 hours.
The CBN emphasised that customers “must not be made to suffer for failed transactions caused by system errors or network failures,” underscoring that financial institutions must take responsibility for any technological or service lapses.
In a major reform, the apex bank also directed all banks and ATM operators to deploy technology capable of automatically reversing failed or partial transactions, thereby eliminating the need for customers to file complaints manually.
Tackling Delays, Poor Service, and Frustration
This policy is a direct response to persistent consumer frustrations over delayed refunds, poor customer support, and transaction failures that have plagued the Nigerian banking sector.
According to insights from Akahi News, these issues have become one of the most frequent complaints among bank customers, particularly during peak transaction periods and festive seasons. The CBN’s latest initiative appears aimed at addressing what has long been described as “a trust gap” between Nigerian banks and their customers.
Financial analysts told Akahi News that the measure could restore confidence in digital payments and reduce the reliance on physical cash withdrawals. They also noted that automatic reversals could significantly reduce pressure on customer service units, which are often overwhelmed by reversal complaints.
Stricter ATM Deployment and Security Standards
Beyond refund timelines, the CBN’s draft guideline also introduces new operational and safety requirements for ATMs nationwide.
Each bank and card issuer is now expected to deploy at least one ATM for every 5,000 active cards. Compliance will be phased — 30% by 2026, 60% by 2027, and full implementation by 2028.
No new ATM deployment, relocation, or removal will be permitted without CBN approval, ensuring strategic placement and coverage equity across both urban and rural communities.
To enhance safety and user experience, all ATMs must:
- Be fitted with anti-skimming devices and CCTV cameras.
- Be located in secure, well-lit areas.
- Comply with Payment Card Industry Data Security Standards (PCI DSS).
- Maintain proper audit logs and display a helpdesk contact.
- Feature tactile symbols for visually impaired users on at least 2% of deployed ATMs.
Additionally, the CBN ordered that ATMs must dispense cash before returning cards, allow free PIN changes, print receipts for all transactions (except balance enquiries), and display clear fee notifications. Only clean banknotes are to be dispensed, and ATMs must have backup power systems to ensure continued operation during outages.
Downtime, Accountability, and Enforcement
In line with the push for reliability, the CBN capped ATM downtime at 72 consecutive hours. If this threshold is exceeded, operators must publicly disclose the cause and provide an estimated restoration time.
Banks and ATM operators will be required to submit monthly reports detailing all active ATM deployments and their physical locations. The CBN will conduct regular audits and inspections to ensure compliance.
Though specific fines were not detailed, the circular warned that defaulting institutions risk sanctions.
CBN’s Broader Reform Agenda
The apex bank clarified that this reform is part of a broader modernisation effort aimed at improving Nigeria’s payment infrastructure and aligning it with global best practices.
It noted that Nigeria’s electronic payment ecosystem has grown dramatically — with over 200 million cardholders and a surge in cashless transactions — but persistent network failures, slow reversals, and weak infrastructure have continued to frustrate users.
“The goal is to build a payments system that works seamlessly for everyone — urban and rural users alike,” the CBN stated.
According to Akahi News analysis, this initiative could be the most comprehensive overhaul of Nigeria’s ATM framework in more than a decade. It aligns with the CBN’s long-term vision to deepen financial inclusion, promote digital banking, and protect consumers from financial loss due to system inefficiencies.
Stakeholders’ Reactions and Next Steps
Bank executives and fintech experts have welcomed the move as a step toward service accountability, though some have raised concerns about the implementation timeline and potential costs associated with upgrading ATM networks.
According to Akahi News findings, consumer advocacy groups are likely to push for stronger penalty clauses to deter future violations, arguing that enforcement will determine the success of the policy.
Stakeholders have until October 31, 2025, to submit their feedback before the CBN finalises and enforces the guideline, which may take effect before the end of the year.
Akahi News Insight
This reform could signal a turning point in Nigeria’s banking experience. For years, customers have endured failed ATM withdrawals, network disruptions, and long refund delays — often without compensation or transparency.
If properly enforced, the 48-hour refund mandate could reshape customer expectations, forcing banks to prioritise service quality and system reliability over profit-driven cost-cutting.
In the words of an Akahi News analyst, “This policy doesn’t just fix the machines — it fixes the trust.”
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