Nigeria's financial sector is witnessing a dramatic shift from traditional brick-and-mortar banking to digital platforms, with data revealing a significant reduction in physical bank networks across the country.
Physical Branches Decline Amid Digital Surge
According to the Central Bank of Nigeria's (CBN) 2024 Financial Sector Statistical Bulletin, Deposit Money Banks shut down a total of 229 branches and cash centres nationwide within a single year. The total count fell from 5,373 in 2023 to 5,144 in 2024. This contraction occurred even as the number of licensed banks increased from 33 to 35, underscoring a strategic pivot away from physical infrastructure.
The driving force behind this retreat is the explosive growth of Point of Sale (PoS) terminals. Transaction volumes processed through PoS channels skyrocketed from 9.85 billion in 2023 to 13.08 billion in 2024. This represents a substantial increase of 3.23 billion transactions, or roughly 33% year-on-year.
More impressively, the value of these PoS transactions more than doubled, leaping from N110.35 trillion to N223.27 trillion. This staggering rise of N112.93 trillion marks an annual growth of approximately 102%. In contrast, ATM usage saw only marginal growth, cementing PoS as the dominant channel for everyday consumer payments.
Uneven Geographic Impact and Regulatory Crossroads
The branch closures were not uniform across Nigeria's states. Lagos State retained its position as the country's banking hub with 1,521 branches, despite an 11-branch reduction. The most severe contraction was recorded in Ebonyi State, where branch numbers plummeted from 120 to just 31, a loss of 89 outlets.
Other states experiencing significant declines included Niger (down 32), Oyo (down 26), with Ekiti and Ondo each losing 18 branches. Notably, the Federal Capital Territory, Abuja, also saw a reduction from 400 to 391 branches. However, some states like Rivers, Delta, Edo, Kaduna, and Kano saw net gains, indicating a more selective, strategic expansion by banks in areas with robust economic activity.
This digital shift is reshaping customer expectations. The 2025 KPMG West Africa Banking Industry Customer Experience Survey noted growing impatience with transaction failures and delays. Fintech firms like OPay and Moniepoint are gaining significant ground, praised for their speed and ease of use, and are now seen as primary financial channels rather than mere alternatives.
Cash Scarcity and an Impending Shake-up for PoS Operators
The surge in PoS reliance has been further fueled by periodic cash shortages. In December 2024, many PoS agents doubled withdrawal charges, with some collecting up to N200 per N5,000 due to empty ATMs. The CBN later fined nine banks a total of N1.35 billion for failing to ensure cash availability, highlighting the critical role PoS agents now play in frontline banking.
However, the booming PoS industry itself faces a major regulatory hurdle. The Corporate Affairs Commission (CAC) has mandated that all PoS agents formally register their businesses. This directive threatens to push an estimated 1.8 million operators out of business if they fail to comply by the deadline, casting uncertainty over the future of financial inclusion in a nation still heavily dependent on cash transactions.
The combined trends of branch closures, digital adoption, and regulatory changes paint a clear picture: Nigeria's banking landscape is undergoing a profound and irreversible digital transformation, with PoS operators at the very heart of this new reality.
