The Central Bank of Nigeria (CBN) has directed deposit money banks and other financial institutions to refund customers for failed Automated Teller Machine (ATM) transactions within 48 hours, in a bid to strengthen consumer protection and restore confidence in the banking system. The instruction is contained in a draft document titled “Exposure of the Draft Guidelines on the Operations of Automated Teller Machines in Nigeria,” published on Saturday.
Signed by Musa I. Jimoh, Director of the Payments System Policy Department, the draft was circulated to banks, payment service providers, card schemes and independent ATM operators, with industry feedback invited by October 31, 2025. The CBN said the measures aim to modernise Nigeria’s payments infrastructure and align local practice with global standards.
Under the proposed framework, failed “on-us” transactions — those performed on a customer’s own bank’s ATM — must be automatically reversed. Where technical issues prevent instant reversal, banks are required to manually refund affected customers within 24 hours. For “not-on-us” transactions conducted at other banks’ ATMs, refunds must be completed within 48 hours.
“Customers must not be made to suffer for failed transactions caused by system errors or network failures,” the circular states. The guidelines require banks and ATM operators to deploy systems that automatically reverse failed or partial transactions, removing the need for customers to lodge complaints to secure refunds. Institutions holding customer funds from failed disbursements must reconcile and return those balances immediately.
The draft also proposes a nationwide restructuring of ATM deployment and management. Banks and card issuers would be required to provide at least one ATM for every 5,000 active cards, with phased implementation targets of 30 percent by 2026, 60 percent by 2027 and full compliance by 2028. Any new installation, relocation or deactivation of ATMs would require prior CBN approval.
To enhance security and user experience, the guidelines require ATMs to feature anti-skimming technology, CCTV surveillance and to be sited in well-lit or enclosed locations. Machines must comply with Payment Card Industry Data Security Standards (PCI DSS), maintain detailed audit logs and display functional helpdesk contact information. At least 2 percent of ATMs must include tactile features to assist visually impaired users.
Operational standards include dispensing cash before returning cards, allowing free PIN changes, issuing receipts for all transactions except balance enquiries, displaying clear transaction fees and dispensing only clean banknotes. Backup power systems must be installed to limit downtime, which the CBN caps at 72 consecutive hours; operators must publicly disclose reasons and restoration timelines for outages exceeding that limit.
Compliance will be monitored through routine audits, physical inspections and monthly reporting by ATM operators detailing deployments and locations. The CBN warned that institutions failing to meet the new standards will face sanctions, although the draft did not specify the penalties.
The apex bank said the overhaul responds to rising reports of failed transactions, cybercrime and deteriorating service quality. Stakeholders have been invited to submit comments and recommendations before the final guidelines are adopted, with implementation expected before the end of the year.
