By Omodele Adigun, Uche Usim Abuja, Obinna Odogwu, Awka, Tony John, Port Harcourt, Tony Osauzo and Ighomuaye Lucky, Benin, Stanley Uzoaru, Owerri
Many bank customers across the country recently complained that they found it difficult to withdraw cash from the automated teller machines (ATM). In some cases, they said the machines had signalled that they had no money to dispense. Frustrated, many of the customers blamed the proliferation of agent banking as responsible for this, while others went as far as alleging conspiracy between the banks and its regulator, the Central Bank of Nigeria (CBN). But dismissing the allegation, its acting director, Corporate Communications, Mr. Osita Nwanisobi, described the conspiracy theory as preposterous.
Hear him: “It is highly preposterous for anyone to say that CBN connived with banks to deprive people of their money. The primary purpose for which ATMs were introduced is to ease the sufferings of Nigerians and to make banking easier and convenient. I assure the public that CBN will investigate the matter.”
Recent experiences of the electronic payment channels’ users, particularly ATMs, are anything but “easier and convenient”.
For instance, sharing his experience with Daily Sun, a civil servant narrated his ordeal thus: “Sometimes, when you go to these ATMs, you won’t see money to withdraw. The machine would display ‘unable to dispense cash.’ Sometimes, it would display a message saying that there was a network issue.
“Whether it is deliberate or not, it is bad that every day we keep hearing different complaints about the poor services rendered by banks, especially as it concerns their ATM.”
A lecturer in the Department of Mass Communication, Nnamdi Azikiwe University, Awka, Dr. Henry Duru, told Daily Sun that he once had a harrowing experience with his colleague.
“During the #EndSARS protest, at some point, myself and one of my colleagues were looking for where to withdraw money. All the ATMs we saw, there was no money in them. At last, we were going along the street and we saw POS operators dispensing money. So, that’s one experience I have actually had. I can still recall an experience I had sometime last year. Somewhere around Victoria Island (Lagos), I went to withdraw money. That was even the day I was travelling back to the East but I bought my ticket a day before. When I got to the park, I decided to withdraw money around the park.
“A lot of our commercial banks, very big commercial banks, have their ATMs there. Unfortunately, none of them had money. I was very surprised. But around 6:30/7am that our bus was about to move, the driver I told earlier that I wanted to withdraw money now pointed to me that PoS people had come out.
“When I went there, they had money. Sometimes, you might begin to suspect that this allegation that banks collude with POS operators is true. This is because, when you withdraw from the ATM, they don’t make money apart from the charges that come at the end of the month,” he said.
National president of Admiralty Lawyers Society of Nigeria, Mr. Angus Chukwuka, said the allegation against bank staff should not be ruled out outright. But he added that some institutions acquire the PoS machine and engage vendors to work for them and remit to the managers.
Chukwuma said: “Everything is possible in Nigeria, given the way things are happening. It was discovered that there was a particular PoS machine that, if you insert ATM card, it immediately captures or absobs all information contained in the card. The truth of the matter is that they (POS operators) are making much gain.
“There are lots of banks and institutions concerned with creating or giving out PoS machines and setting up young businesses. There are many companies involved in the business. It is not like they go to banks and collect PoS machines. There are several outlets that it is their business to acquire many PoS machines and give it (machine) to several vendors. They make sure they (vendors) are given cash and they make returns. It is not that if you want PoS you go to bank and get one. If it’s that way, it would not spread the way it is spreading. There are people who it is their work. They acquire PoS and give it out to registered individuals or organisations. They provide cash for the PoS vendors and they collect their gain.
“It is not like it is bank staff that are involved in that business. No. There are companies or firms that are into the business. Owners of the PoS machines supervise the registered vendors and ensure they render returns.
“The principals or managers of the firms liaise directly more with banks. They try to provide coverage for the vendors under their coverage, by providing cash for them. At times, they even provide outlets or sheds for them.”
Similarly, Mr. Festus Ogwuche, a legal expert, said: “I see that part of these PoS operators is the extension of the private business of the bankers. It is a sort of bringing double interest in the banking transactions.
“And in that circumstance, loyalty becomes a question here. Even if anything like that is to be done, it should be properly organised. The CBN has directives, orders and regulations. But it has not taken time to look at that level of operation. The CBN should regulate what goes on in the PoS vendors’ operations. I doubt if CBN has a data of PoS operators in this country.”
But point of sales (PoS) vendors in Edo State denied collusion with bank officials who are into PoS business to mop up cash from ATM machines.
One of the operators, Mrs. Gladys Edigin, reacting to the allegation, said: “To say that most PoS are owned by bankers, that is not correct but I know that a few of the banks also have PoS terminal points. But what is important is that the PoS has created a lot of jobs for people across the country by reducing the stress the banks would have gone through in attending to a lot of people in their banking halls.
“I think the issues of PoS actually became very important owing to the coronavirus pandemic era, where they needed to reduce the level of people gathering in the banking halls. It is even more convenient for people to use the PoS by paying a little fee, which I think a lot of people are happy to pay, looking at the time they would have spent in the bank. What is important is that it has created jobs for a lot of people. It has also liberalised the banking sector by ensuring that people no longer gather in the banking halls, creating some sort of inconvenience to them.To me, it is a welcome development. The ATMs in banks are still working. Sometimes, I use the ATM. I also sometimes use PoS, depending on the urgency that it requires, but to say that the PoS withdraw all the money, that is not possible.
“The PoS is used to create opportunity for those who are in a hurry to carry out their transactions but if you are patient enough, you can still carry out your transactions with the banks but it is just that you waste much time in the bank than using a PoS that you pay a fee to. The banks are not colluding with the PoS operators at all”, she stressed.
On his part, Elvis Omoregie, a PoS operator, admitted some bank staff operate PoS business but that they have no right to stock money and starve ATM machines.
“For the question, yes, some banks’ staff really have PoS stands but that’s not to say they have the right to stock money for their PoS and allow the ATM machine of their banks to be starved of funds. It’s a totally false and wrong notion for anyone to have that belief. I have a sister and close friends who are bank staff who are into the business. They are not the reason for unavailability of funds in ATMs but the Central Bank of Nigeria is the problem, quote me. I think Nigerians should urge CBN to inject more money into the system,” he said.
Similarly, Rachael Ogiemwonyi, a PoS vendor, said “There is no connivance between the banks and the PoS operators.
“For me, that is not true. I get my money from the bank. Any amount I am in need of, what I need to do is to call my bank and the money will be sent to me.
“Before the PoS came into full operation, I had gone to the bank where I stayed for a very long time just because I wanted to withdraw money with my ATM card and after one of the persons I met there made his third attempts, he could not make further withdrawal.
“So, I left the bank for another. I visited up to two other banks before I could make some withdrawals. The time I am talking about, there was no PoS. So, it would be wrong to accuse the banks of any form of connivance,” she added.
How POS operates hand in glove with banks in Imo
Investigation by our correspondent revealed that the majority of the POS machines in Owerri, Imo State, were owned by bankers. In fact, some of them don’t hide it from their customers and perform other transactions such as assisting in opening of accounts.
A banker with one of the new-generation banks in the country, who did not want his name mentioned, disclosed that it was a way to make extra income for themselves.
He said, “It is not a secret, the bank I work for is aware, they offer me cash and I in turn make money for myself and the bank. We noticed people these days don’t have patience to queue at the ATM, they prefer the POS, which is fast and easy; that is why get assistance from our banks, they make profit from every transaction.”
There are even some cases of bank managers who have POS operators beside their bank. In such banks, cash is easily mopped up and the customers don’t have a choice but to patronise the POS point owned by the bank manager just beside the bank.
A customer who narrated his experience to our correspondent said, “When I visited that ATM at the popular Bank Road, I was told by one of the bankers that there was no cash in their machine; they even directed me to where to go, through the security guards outside the bank.”
However, in Abuja, most PoS operators said they avoid siting their kiosks close to any ATM machine because many bank customers actually prefer using the ATM to patronising them (PoS operators) because of their higher charges.
Yagana Sadiq, a PoS operator in Kubwa area of Abuja, had this to say: “When you withdraw N10,000 using your ATM card on my PoS, I’ll charge you N150 for that transaction.
“Some customers would say it’s too high but the banks also charge us on many fronts. The profit margin is extremely low. Most times, I don’t keep more than N300,000 cash with me at any given time because of security and demand,” she said.
Monday Akpan, another PoS operator, said most people now dread ATMs because their cards could be swallowed by faulty machines and they also risk being attacked by thieves.
“These days, some ATMs do not have sufficient cash. We are now hot cakes,” he said.
For Moses Akin, many PoS operators are funded by bank staff: “I’m aware of about three owned by bankers. They ensure they never run out of cash.But this business is really not lucrative, especially if you’re not in a market environment.”
Insecurity may also b responsible for the proliferation of the PoS business. According to Mr. Tunde Mabawonku, the chief financial officer of Wema Bank.Hear him: “The insecurity in the country has its own challenges. Since 2018, we had almost six robbery attacks. In Iju-Itaogbolu, we were burgled; we suffered major loss. For us, the money lost was not the problem, but the loss of lives, where they killed staff; killed customers. This is what you cant get back. Some of the locations where we have closed down, once there is a business justification, we will go back. For example, Igbara Oke, we are reopening it; we suffered robbery attack but we are going back. Iyin Ekiti, we also had robbery attack, we are going back. Okuku in Osun State, we had robbery attack. We had a meeting. We said, let things calm down a bit. So, we take justification, look at it and determine when to go back. One of the things we try to do is turn to technology through agency banking, through other means, that, at least, get the community transacting pending when we see that the business is justified. Then we will come and rebuild the branch.
“One of the things we realised as in a retail banking is that you are only as good as the number of customers. So, there is what we call the brown bank or the orange bank that has almost 20 million customers; the blue bank that has 10 million customers. The more customers you have, the more you can transact, the more income you make. For us, we build that customer base, but we build it deliberately, comfortable that the system works all the time. We have a target within ourselves. By the end of the year, we can look our customers in the face and say: If our system fails, we will pay you; so we want to push ourseleves to that level that we are sure we are always up. Go to any ATM, and you are unable to withdraw cash, we will pay you; if our card does not work, we will pay you. This is to make the customers assured that these guys have put their money where their mouth is.”