Nigeria’s banking sector shut down 229 physical branches within one year as more customers moved away from banking halls to Point of Sale transactions.
This was revealed in the Central Bank of Nigeria’s 2024 financial sector statistical bulletin, which showed that Deposit Money Bank branches dropped from 5,373 in 2023 to 5,144 in 2024.
The data covers branches and cash centres of commercial, merchant and non-interest banks across the 36 states and the Federal Capital Territory.
Despite the closure of branches, the total number of licensed banks increased from 33 to 35 in 2024, indicating that banking services are shifting rapidly from physical locations to electronic platforms.
The report showed that POS terminals have become the most popular channel for daily transactions. POS transaction volume rose from 9.85 billion in 2023 to 13.08 billion in 2024.
This represents an increase of about 3.23 billion transactions, or roughly 33 per cent.
The value of POS transactions more than doubled within the same period, rising from N110.35 trillion to N223.27 trillion.
ATM usage also increased, but at a slower pace. ATM transaction volume grew slightly from 1.01 billion to 1.02 billion, while the value rose from N28.21 trillion to N29.12 trillion.
The figures show that POS terminals are now more central to daily payments than ATM withdrawals or visits to bank branches.
Lagos State remained Nigeria’s banking hub with 1,521 branches in 2024, although this was a drop from 1,532 in 2023.
Ebonyi State recorded the sharpest decline nationwide, losing 89 branches as its total fell from 120 to 31.
Other states that recorded major reductions include Oyo, which lost 26 branches, Niger with 32 closures, Ekiti with 18, and Ondo with 18.
The Federal Capital Territory also lost nine branches, dropping from 400 to 391, showing that closures were not limited to rural areas.
Some states, however, recorded growth. Delta added six branches, Rivers gained eight, while Edo, Kaduna and Kano each added eight new branches.
According to analysts, branch expansion is now focused on areas with rising population and commercial activity, even as the national total continues to decline.
A 2025 KPMG West Africa Banking Industry Customer Experience Survey noted that customers are becoming more sensitive to charges, service reliability and transaction security.
The report stated, “Customer experience in the SME segment remained largely stagnant, recording a marginal decline compared to last year.”
It added, “While fintech leaders such as OPay and Moniepoint continued to post gains, these improvements were not enough to offset the broader downturn driven by traditional banks.”
KPMG further said, “Across the six pillars of customer experience, fintechs continue to outperform traditional banks, particularly on time and effort and expectations.”
The surge in POS usage also came amid cash shortages. In December 2024, POS charges reportedly doubled in some areas, with agents collecting up to N200 per N5,000 withdrawal.
Many bank ATMs were empty during the period, forcing customers to rely on POS operators.
The CBN later sanctioned nine Deposit Money Banks with fines totalling N1.35bn for failing to dispense cash through ATMs during the festive season.
Each bank was fined N150m, and the CBN said the fines would be deducted directly from their accounts.
