The Central Bank of Nigeria has directed banks to immediately reverse failed automated teller machine transactions, introducing stricter timelines designed to improve customer protection and strengthen the reliability of the country’s payment systems.
Under newly revised Guidelines on the Operations of Automated Teller Machines in Nigeria, the apex bank said financial institutions must ensure that customers receive prompt refunds whenever ATM transactions fail but their accounts are debited.
The directive places particular emphasis on transactions carried out on a customer’s own bank ATM, commonly referred to as “on-us” transactions. According to the regulator, such failed transactions must be reversed instantly.
The guideline states that automated reversal for these transactions should occur almost immediately, typically within minutes. Where automated systems fail due to technical glitches or network disruptions, banks are required to complete a manual reversal within 24 hours.
For transactions conducted on ATMs belonging to other banks, known as “not-on-us” transactions, the Central Bank said refunds must be completed within a maximum of 48 hours.
The regulator explained that the revised rules are intended to reduce the frequent complaints by customers about delayed refunds following failed ATM withdrawals.
The guideline states that automated reversals for on-us transactions should occur in less than five minutes, while automated systems handling not-on-us transactions should resolve such issues in less than 15 minutes when the systems are functioning properly.
The Central Bank noted that the move forms part of a broader effort to strengthen Nigeria’s digital payment infrastructure as financial services become increasingly technology-driven.
“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 stated.
It added that since the earlier framework was introduced, the financial ecosystem has evolved significantly.
“Since then, the payment ecosystem has witnessed developments such as increased sophistication in digital finance, cyber threats and financial inclusion,” the Central Bank said.
The new rules therefore update the ATM provisions that were originally contained in the broader 2020 framework governing electronic payment channels, which also covered point-of-sale terminals, mobile POS systems and web payment services.
In addition to tightening refund timelines, the revised guidelines introduce new operational requirements aimed at improving the availability and efficiency of ATM services across the country.
One of the major provisions requires banks and other card issuers to deploy at least one ATM for every 7,500 payment cards issued to customers.
The implementation will be gradual. Banks are expected to meet 30 percent of the requirement in 2026, increase compliance to 60 percent by 2027, and achieve full compliance by 2028.
The Central Bank said the measure is intended to ensure that the growing number of bank customers across Nigeria have improved access to ATM services.
The regulator also directed that ATM machines must be deployed within reasonable proximity to one another across both urban and rural locations.
Banks and other deployers are required to obtain prior written approval from the Central Bank before deploying, relocating or decommissioning ATM terminals.
Operational standards were also included in the revised framework to ensure consistent service quality.
The guideline states that ATM downtime caused by technical faults must not exceed 72 consecutive hours. If machines remain unavailable beyond that period, customers must be properly informed by the deployer.
For ATMs equipped with biometric authentication features, operators must maintain strict service performance levels.
These include achieving a minimum biometric authentication success rate of 98 percent each month, maintaining transaction approval times of no more than 1.2 seconds at the 95th percentile, and ensuring overall system uptime of at least 99.5 percent, excluding scheduled maintenance periods.
The regulator also emphasised transparency and customer communication at ATM terminals.
Operators must ensure that helpdesk contact information is clearly displayed and functional on ATM machines, while all applicable transaction charges and service fees must be clearly disclosed to customers.
ATM terminals are also required to provide transaction receipts whenever requested by customers, except for balance inquiry transactions.
Such receipts must include key transaction details including the amount withdrawn, the identity of the terminal, and the exact date and time of the transaction.
The Central Bank further directed that ATM screen displays and printed receipts must remain clear and legible to customers.
Machines must also be properly maintained to ensure smooth dispensing, deposit and cash recycling functions.
To minimise service disruptions, banks and ATM deployers are required to maintain monitoring systems capable of identifying the causes of failed transactions and tracking cash levels inside ATM vaults.
ATM machines must also be replenished regularly to prevent cash shortages and must not dispense damaged or unfit banknotes.
The regulator stressed that cash availability at ATM terminals must be maintained at all times.
Banks are also responsible for ensuring that ATMs operated by non-bank deployers are adequately funded through service level agreements that clearly define responsibilities for cash provisioning.
Additional operational requirements include providing customers with free personal identification number change services at ATM terminals and ensuring that suspicious transactions are monitored and reported to the Central Bank.
Operators must also maintain backup power systems, such as inverters, to ensure uninterrupted ATM operations.
The guidelines also require that waste baskets be provided at ATM locations to enable customers properly dispose of printed receipts.
