Nigeria’s banking landscape is undergoing a profound but largely understated transformation, one that is steadily redrawing how millions of citizens access money, make payments, and interact with financial institutions. Beneath the surface of everyday transactions at roadside kiosks, neighbourhood shops, fuel stations, and market stalls, a silent retreat is taking place: banks are shutting down physical branches at an unprecedented pace, while Point of Sale (POS) terminals are rapidly becoming the backbone of daily financial activity.
According to the Central Bank of Nigeria’s (CBN) 2024 Financial Sector Statistical Bulletin, no fewer than 229 bank branches were shut across the country within a single year, as Nigeria’s Deposit Money Banks (DMBs) scaled back their physical footprints in response to changing customer behaviour and the explosive growth of electronic payment channels.
DDM NEWS analysis of the data shows that the total number of bank branches nationwide fell from 5,373 in 2023 to 5,144 in 2024, a decline that cuts across commercial banks, merchant banks, and non-interest banks operating in all 36 states and the Federal Capital Territory (FCT). This contraction occurred even as the number of licensed banks in Nigeria rose from 33 to 35 during the same period, underlining a paradox that now defines the sector: more banks, but fewer physical branches.
Banking Without Buildings
The implications of this shift are far-reaching. Traditionally, a bank branch symbolised stability, trust, and presence within a community. Today, that symbolism is fading. DDM NEWS findings indicate that Nigerian banks are increasingly betting on digital platforms, agency banking, and POS networks rather than maintaining expensive brick-and-mortar infrastructure.
At the heart of this transition is the staggering growth of POS usage. The CBN data reveals that POS transaction volumes jumped from 9.85 billion in 2023 to 13.08 billion in 2024, representing an increase of 3.23 billion transactions, or roughly 33 per cent year-on-year growth.
Even more striking is the value of these transactions. POS transaction value more than doubled within one year, soaring from ₦110.35 trillion in 2023 to ₦223.27 trillion in 2024. This represents a massive increase of ₦112.93 trillion, or 102 per cent, underscoring just how central POS terminals have become to Nigeria’s cash and payment ecosystem.
For many Nigerians, especially in urban neighbourhoods and semi-urban communities, POS operators have effectively replaced bank tellers. Cash withdrawals, transfers, bill payments, and even savings-related transactions are now routinely conducted outside formal banking halls.
ATMs Losing Ground
While Automated Teller Machines (ATMs) remain a fixture of Nigeria’s banking infrastructure, their relevance is growing at a far slower pace. The CBN bulletin shows that ATM transaction volumes edged up only marginally, from 1.01 billion in 2023 to 1.02 billion in 2024, representing less than one per cent growth.
In value terms, ATM transactions rose from ₦28.21 trillion to ₦29.12 trillion, an increase of about ₦909 billion, or just over three per cent. Compared to the explosive expansion of POS transactions, these figures suggest that ATMs are increasingly playing a secondary role in how Nigerians access cash.
Financial analysts who spoke with DDM NEWS say this trend reflects a deeper reality: cash withdrawals are no longer the primary use case for financial interaction. Instead, everyday payments, transfers, and micro-transactions, often facilitated by POS agents and fintech platforms, now dominate consumer behaviour.
Uneven Closures Across the Map
The retreat from physical branches has not been uniform across Nigeria. While some states have seen dramatic declines, others have recorded modest expansions, revealing how banks are becoming more selective about where they maintain a physical presence.
Lagos State, Nigeria’s undisputed financial hub, continued to host the highest number of bank branches in the country, with 1,521 branches in 2024. However, even Lagos was not immune to the trend, recording a decline of 11 branches, down from 1,532 in 2023. Despite this reduction, Lagos still has more than five times the number of branches found in any other state.
The most dramatic contraction occurred in Ebonyi State, which recorded the largest single-year decline nationwide. The number of bank branches in the state collapsed from 120 in 2023 to just 31 in 2024, a staggering loss of 89 branches. Industry observers describe this as one of the most significant pullbacks of formal banking infrastructure in recent memory.
Other states also experienced notable declines. Oyo State lost 26 branches, bringing its total to 200. Niger State shed 32 branches, falling from 108 to 76. Ekiti State recorded a reduction of 18 branches, while Ondo State also lost 18, dropping from 127 to 109.
Anambra and Ogun States each lost eight branches, Plateau State lost seven, and Cross River State recorded five closures. The Federal Capital Territory, often seen as insulated from such contractions, also saw its bank branch count fall by nine, from 400 in 2023 to 391 in 2024, signalling that closures are not limited to rural or low-density areas.
Where Branches Are Still Growing
Despite the overall decline, DDM NEWS findings show that some states recorded gains, reflecting shifting commercial and demographic dynamics. Delta State added six branches, increasing from 182 to 188. Rivers State expanded from 272 to 280 branches.
Edo, Kaduna, and Kano States each gained eight new branches, while Katsina added three. Adamawa and Jigawa States recorded two additional branches each, and Kogi State gained one.
Analysts say these increases suggest that banks are now targeting areas with rising commercial activity, population growth, or strategic importance, even as they scale back elsewhere.
Customers Caught in the Middle
As banks redesign their service delivery models, customers are adjusting — often under pressure. According to the 2025 KPMG West Africa Banking Industry Customer Experience Survey, inflationary pressures and rising living costs have made Nigerians far more sensitive to bank charges, service reliability, and transaction security.
The survey notes that while trust and integrity remain core pillars of public confidence in banks, tolerance for failed transactions, delays, and complex service processes is rapidly eroding. This shift is particularly pronounced among small and medium-sized enterprises (SMEs), which rely heavily on smooth daily transactions.
“Customer experience in the SME segment remained largely stagnant, recording a marginal decline compared to last year,” the report stated. “While fintech leaders such as OPay and Moniepoint continued to post gains, these improvements were not enough to offset the broader downturn.”
The report further noted that traditional banks were largely responsible for the decline, citing structural constraints that limit their ability to respond swiftly to evolving customer needs.
Fintechs Take Centre Stage
DDM NEWS findings align with KPMG’s conclusion that fintech companies are no longer merely alternatives to banks but are fast becoming primary channels for daily financial interactions. Expanded POS networks, mobile wallets, and agency banking models have entrenched fintechs at the heart of Nigeria’s payment ecosystem.
“Across the Six Pillars of customer experience, fintechs continue to outperform traditional banks, particularly on Time & Effort and Expectations,” the report added, noting that customers associate fintech platforms with faster processing, better uptime, and simpler interfaces.
The Cost of Convenience
Yet, the POS boom has not come without consequences. In December 2024, POS agents across Nigeria arbitrarily hiked transaction charges, in some cases by up to 100 per cent, with customers paying as much as ₦200 to withdraw ₦5,000.
This happened amid widespread cash scarcity, as many bank ATMs remained empty during the festive season. Inside banking halls, customers were often turned away, or restricted to withdrawals of ₦10,000 or ₦20,000, deepening public frustration.
Despite repeated warnings, the Central Bank of Nigeria later sanctioned nine Deposit Money Banks, imposing fines totalling ₦1.35 billion for failing to ensure cash availability via ATMs. Each bank was fined ₦150 million, with the penalties directly debited from their CBN accounts.
The sanctioned banks included Fidelity Bank, First Bank, Keystone Bank, Union Bank, Globus Bank, Providus Bank, Zenith Bank, UBA, and Sterling Bank.
A System in Transition
As DDM NEWS concludes, Nigeria’s banking sector is clearly at a crossroads. The closure of 229 branches in a single year is not merely a cost-cutting exercise; it is a signal of a structural transformation driven by technology, consumer behaviour, regulatory pressures, and economic realities.
While POS terminals and digital platforms have brought financial services closer to millions, they have also exposed vulnerabilities around pricing, regulation, and consumer protection. The challenge ahead for regulators, banks, and fintechs alike will be balancing innovation with fairness, access, and trust — in a financial system that is increasingly invisible, but more powerful than ever.
