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Introduction
The Central Bank of Nigeria (CBN) on Thursday, October 9 2025, issued draft guidelines for the operation of Automated Teller Machines (ATMs) in Nigeria ("Guidelines").
In its circular to banks, other financial institutions and payment service providers, the CBN stated that the essence of the Guidelines is to review, improve and establish minimum standards for the deployment, operations and maintenance of ATMs. Therefore, improving access to ATM services in Nigeria, strengthening security protocols and enhancing consumer protection in line with global best practices.
In this newsletter, we examine some of the key provisions introduced by the Guidelines.
1. REGISTRATION OF INDEPENDENT ATM DEPLOYERS (IADs)
Under the existing framework, Independent ATM Deployers (IADs) simply operate in partnership with banks and other financial institutions without the need for registration.
Under the Guidelines however, the registration of IADs with the CBN before deployment or operation of an ATM at any location in Nigeria is a mandatory requirement.
IADs are non-bank entities, licensed or registered by the Central Bank to install, own, and maintain ATMs, in various locations such as retail stores, shopping malls or underserved areas, subject to entering into agreement(s) with banks or card schemes for settlement and cash provisioning.
As part of the requirements for licensing and registration, IADs are to provide the CBN with their corporate profile, technical and operational capacity, evidence of partnership agreement with a bank for cash provisioning, and evidence of compliance with extant payment systems regulations.
2. ATM TECHNOLOGY STANDARDS AND SPECIFICATIONS
According to the Guidelines, ATM systems shall have audit trail and logs capabilities, which are detailed enough to facilitate investigations, reconciliation and dispute resolution.
The Guidelines also maintain the existing regulatory standards for payment cards. It provides that all ATM deployers/acquirers shall comply with Payment Card Industry Data Security Standards (PCI DSS), developed and administered by the Payment Card Industry Security Standards Council, an independent body in the United States of America (USA).
Furthermore, card readers shall be identified by a symbol that represents the card; the direction in which the card should be inserted into the reader; and all ATMs shall accept cards horizontally with the chip upwards and to the right.
The Guidelines provides that at least 2% of ATMs deployed by each acquirer shall have tactile graphic symbols for the benefit of visually impaired ATM users. The locations of such ATMs are to be visibly publicized on the corporate website of the ATM acquirer.
3. ATM DENSITY AND EXPANSION TARGETS
The Guidelines establish requirements for the deployment of ATMs by banks and IADs, particularly in respect of the location and density of ATM deployment.
Specifically, the Guidelines impose a requirement on card issuers to deploy at least 1 ATM for every 5,000 payment cards issued. The Guidelines also establish a three-year timeline for full compliance with the staggered targets. To achieve this, the following incremental milestones should be met: 30% by end of 2026, 60% by end of 2027; and 100% by end of year 2028.
This development is intended to address ATM density and geographical distribution challenges, which often result in long queues and difficulties accessing cash, especially in underserved locations.
Ultimately, the requirement aims to revive and strengthen ATM infrastructure, ensure reasonable proximity of ATMs to users, maintain cash availability at all times, and enhance overall consumer access and operational efficiency in the payment network.
4. MONTHLY RETURNS
Unlike the Electronic Payment regulations, the Guidelines introduce a deadline for filing monthly returns. ATM operators must submit their monthly returns by the 5th day of the following month. This compliance requirement enables effective monitoring of ATM transaction volumes by the CBN and enhances the efficiency of the ATM payment network.
Conclusion
The introduction of the Guidelines represents a significant step forward by the CBN in streamlining and improving the framework for the operation of ATMs in Nigeria.
If enacted and implemented, it will enhance financial inclusion, fortify operational integrity, advance consumer protection, and align Nigeria's payment infrastructure with internationally recognized best practices.
Stakeholders are encouraged to seize the opportunity presented by the Central Bank of Nigeria to submit comments and feedback for the enhancement of the Guidelines before October 31, 2025.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
