In a surprising turn of events, Nigeria's financial industry has come to a consensus: commercial banks have lost the cash arms race to banking agents, also known as POS agents. Despite the flurry of policy changes from the Central Bank of Nigeria (CBN) in late 2024, POS agents have emerged as the most reliable way to access cash across the country.

The CBN's efforts to curb the reliance on POS agents, including the imposition of withdrawal limits and threats of penalties for banks found selling mint notes to currency dealers, have had limited impact. Instead, many POS agents have responded by raising withdrawal fees, which remain uncapped by the CBN. This fee hike trend has been particularly noticeable in parts of Lagos, where withdrawing cash has become more expensive for customers.

In-depth interviews with over 20 POS agents and customers have revealed a clear picture: withdrawal fees vary widely depending on the location. While some agents have increased their charges, others continue to offer the same rates as before. The lack of standardization in fees has led to a situation where customers are forced to navigate a complex landscape to access their cash.

The data collected from these interviews illustrates the variations in withdrawal charges for different amounts. The chart below shows the disparity in fees across different locations:

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The rise of POS agents as the primary means of accessing cash has significant implications for the financial industry in Nigeria. It highlights the need for a more comprehensive approach to addressing the cash crisis, one that takes into account the complexities of the informal economy and the role of POS agents within it.

As the situation continues to evolve, it remains to be seen how the CBN and commercial banks will respond to the growing dominance of POS agents. One thing is clear, however: the cash arms race has reached a turning point, and the future of Nigeria's financial industry hangs in the balance.

In the coming months, it will be crucial to monitor the developments in this space and assess the impact of the POS agent phenomenon on the broader economy. As the dust settles, one thing is certain: the way Nigerians access cash will never be the same again.