Nigeria’s banking sector is rapidly shrinking its physical footprint as customers increasingly rely on Point of Sale (POS) terminals and electronic channels for everyday transactions.
New figures from the Central Bank of Nigeria’s (CBN) 2024 Financial Sector Statistical Bulletin show that banks shut down 229 branches nationwide within one year. The total number of Deposit Money Bank branches fell from 5,373 in 2023 to 5,144 in 2024, despite the number of licensed banks rising from 33 to 35 during the same period.
The data, which cover commercial, merchant and non-interest banks across all 36 states and the Federal Capital Territory (FCT), highlight a clear shift away from traditional banking halls toward digital platforms and agent banking services.
POS terminals have emerged as the dominant channel driving this transition.
Transaction volumes on POS platforms climbed sharply from 9.85 billion in 2023 to 13.08 billion in 2024, representing a growth of about 33 per cent. Even more dramatic was the increase in transaction value, which surged from ₦110.35 trillion to ₦223.27 trillion, more than doubling within a year.
ATM usage, by contrast, recorded only marginal growth. Transaction volumes rose slightly from 1.01 billion to 1.02 billion, while transaction value increased by just over three per cent, from ₦28.21 trillion to ₦29.12 trillion.
According to analysts, these figures confirm that POS terminals now play a far more central role in consumer payments than ATM withdrawals or in-branch banking.
Branch closures were uneven across the country. Lagos State remained Nigeria’s banking hub with 1,521 branches in 2024, although this was 11 fewer than the previous year. The state still maintained more than five times the number of branches in any other state.
Ebonyi State recorded the steepest decline, losing 89 branches as its total fell from 120 in 2023 to just 31 in 2024. Significant reductions were also recorded in Niger, Oyo, Ekiti and Ondo states. The FCT was not spared, shedding nine branches to close the year with 391.
However, some states bucked the national trend. Delta, Rivers, Edo, Kaduna and Kano recorded increases in branch numbers, suggesting that banks are now concentrating physical expansion in areas with stronger commercial activity or population growth.
Industry experts say the shift reflects broader changes in Nigeria’s financial landscape, including cash shortages, the rapid expansion of agent banking networks, mobile wallet adoption and the convenience of accessing services closer to homes and markets.
Customer behaviour is also being shaped by rising expectations.
The 2025 KPMG West Africa Banking Industry Customer Experience Survey notes that as more Nigerians move to digital channels, tolerance for failed transactions, delays and complex processes is declining.
While trust remains a key factor, fintech companies continue to outperform traditional banks in speed, reliability and ease of use, particularly for small and medium-sized enterprises.
The surge in POS usage occurred despite higher charges imposed by agents, especially during the cash crunch at the end of 2024. During that period, many bank ATMs were empty, forcing customers to depend on POS operators who charged as much as ₦200 per ₦5,000 withdrawal.
The situation prompted the CBN to sanction nine banks with a combined ₦1.35 billion fine for failing to ensure cash availability through their ATMs during the festive season. Each bank was fined ₦150 million, with the penalties debited directly from their CBN accounts.
