Cash is expensive in Nigeria. When undercover agents for the Central Bank of Nigeria tried to buy cash on the open market, they found sellers charging markups of 20 to 40 percent of face value, the bank governor, Olayemi Cardoso, said at a March event in Abuja. Since 2012, the Central Bank has promoted a series of policies to reduce the amount of cash in circulation and shift Nigerians to electronic payments, which are lower cost, more secure, and more traceable. The Central Bank releases limited cash to commercial banks, who in turn cannot match public demand. When the banks do have cash, middlemen often take it in bulk to sell onward at a higher price.
In exchange, the Central Bank also built an ever-more-capable digital infrastructure for electronic payments, boosting Nigeria’s financial technology industry, and the volume of electronic payments in Nigeria grew around 16 times from 2018 to 2024. “Once that foundation was there, the cashless economy has done well,” says electrical engineer Funke Opeke, an eminence in the Nigerian technology scene who founded and later sold a crucial telecommunications and data services company, MainOne.
On the one hand, that is a victory. On the other hand, only those with reliable access to the Internet (about half of Nigeria’s population) can count on electronic payments. The rest still need cash.
Nigerians Rely on Point-of-Sale Operators
Agricultural consultant ‘Gboyega Osobu, in Lagos, once had a client that developed a cashless pay product but soon ran up against reality: Managers needed cold hard cash when they went out to visit farmers in the field.
Enter the point-of-sale (POS) operators. In urban peripheries and rural places with at least intermittent Internet connectivity, tens of millions of entrepreneurs have begun using POS terminals and bags of cash to do the work that conventional banks do not: provide an avenue to deposit or withdraw cash and make transfers. POS operators throng commercial roads throughout Nigeria, with the acronym often hand-painted on a shack or nearby wall. Other operators walk around markets, looking like restaurant waitstaff come to collect payment, but offering their services to anyone who needs cash or to make a payment, for a 1 to 2 percent transaction fee.
“The ordinary Nigerian prefers to go to the POS to get cash rather than go to the ATM,” says Zakari Isah, a POS operator and general secretary of the Association of POS Users of Nigeria (APOSUN).
That may be because getting and using cash in Nigeria is a quest unsuitable for the faint of heart. The biggest available bill is 1,000 naira, equivalent to about US $0.63 (the average daily wage is around $5). There are only so many notes you can carry in even the fattest wallet, and that’s if you can find an ATM. There were only 21,500 ATMs (as of 2024) serving Nigeria’s 220 million people, putting Nigeria ahead of the sub-Saharan African average, but behind middle-income countries. If you manage to find an ATM, it must have electricity, an Internet connection, and sufficient cash, none of which are guaranteed for long in Nigeria. Many banks limit daily withdrawals to 20,000 to 50,000 naira ($12.60 to $31.50) per day, and they still can’t keep up with demand.
ATMs per 100,000 adults, per World Bank
| Nigeria (2021) | 16.1ATMs |
| United States(2009) | 174 ATMs |
| Euro area (2021) | 62.8 ATMs |
| Sub-Saharan Africa (2021) | 6.9 ATMs |
In 2013, the Central Bank of Nigeria wrote regulations allowing retailers with POS terminals to offer “agent banking” services on behalf of banks. This included depositing and withdrawing money from an account, paying utility bills, and other simple transactions—but not more complex operations such as loans, insurance, or handling foreign currency.
Isah started his POS operations in 2015, in which he retails not goods but cash and other financial services. He and other early adopters learned the hard way that it is wise to keep only small amounts of cash on hand if you operate on the street, and to stay in busy places, such as markets, ideally within the field of view of a security camera. As a particular business scales up above certain daily cash amounts, however, APOSUN recommends operators rent an office, hire security, and keep detailed customer records.
Still, despite the risks and barriers, Nigeria now has somewhere between 20 million and 30 million POS operators, dwarfing the size of the conventional bank and ATM network. For an investment of as little as 30,000 naira, an entrepreneur can buy a POS terminal and start facilitating payments. If they front some of their own cash, which many buy from local businesses, they can soon begin selling cash, too.
Academic researchers figure that both ATMs and POS payments on the whole have had a positive impact on the country’s economy. Yet they and Isah decry the effect of weak network connectivity on Nigerians’ financial lives. “Poor network service impedes transactions,” Isah says. There have been cases of network interruptions in the middle of a transaction that leave customers in the lurch and furious with their POS operator, he says.
As Nigeria expands its broadband backbone to more and more rural areas, POS operators will surely follow, with their low-tech banking helping unbanked residents handle cash shortages until they, too, adopt mobile payments.