ICYMI: CBN issues ATM guidelines to banks, directs 48 hours refund on failed transactions

The Central Bank of Nigeria (CBN) has directed banks to refund customers for failed automated teller machines (ATMs) transactions within 48 hours.

The apex bank released the new guidelines in a circular signed by Musa Jimoh, director of the CBN’s payment system policy department, on October 10.

The new framework, titled ‘Draft Guidelines on the Operations of Automated Teller Machines (ATMs) in Nigeria,’ was directed to banks, other financial institutions, and payment service providers.

“The Guidelines on the Operations of Automated Teller Machines in Nigeria have been developed to establish minimum standards for ATM deployment, operations, and maintenance, promote improved access to ATM services in urban and rural areas, strengthen security protocols and enhance consumer protection and align ATM operations with global best practices and regulatory expectations,” the circular reads.

“The draft guidelines are hereby exposed for comments/feedback from various stakeholders for four weeks from the date of this circular.

“All stakeholders, including deposit money banks, independent ATM deployers, card schemes, payment service providers, and the banking public, are invited to submit comments for consideration.”

‘ALL BANKS, ATM DEPLOYER MUST COMPLY’

Under the proposed framework, the CBN made a strong consumer-focused change to transaction reversals.

The apex bank said the guidelines on the operations of ATMs shall apply to all deposit money banks, other financial institutions, independent ATM deployers and any card-issuing institutions in Nigeria.

“Any Independent ATM Deployer (IAD) must obtain prior written approval from the Central Bank before commencing deployment activities,” CBN said.

“The licensing/registration process shall include submission of corporate information, technical and operational capacity assessment, evidence of partnership agreement with a bank for cash provisioning, and compliance with extant payment systems regulations.”

DEPLOYMENT AND ACCESS RULES 

In a bid to expand financial access, the new draft guideline mandates that every card-issuing bank must deploy at least one ATM for every 5,000 payment cards issued, with full compliance expected by 2028.

Deployment targets are staggered: 30 percent by 2026, 60 percent by 2027, and 100 percent by 2028.

The CBN said ATMs must be located within reasonable distances in both urban and rural areas to ensure inclusion, and all deployers are required to obtain written approval from the apex bank before installing or decommissioning machines.

CBN MANDATES CAMERAS, ANTI-SKIMMING DEVICES AT ATMS

The circular also introduces mandatory security features, including cameras that capture all transactions (except keystrokes), anti-skimming devices to prevent fraud, and physical safeguards for ATMs located outdoors.

“Every ATM must be equipped with surveillance and anti-skimming technology, while ensuring the confidentiality of customer transactions,” the circular said.

“Where a user blocks camera capture, the ATM should be capable of aborting the transaction.”

For inclusivity, the guideline requires that at least 2 percent of all ATMs deployed by each acquirer must include tactile graphic symbols for use by visually impaired customers.

The locations of such ATMs must be publicly listed on the deployer’s website.

“The ATM downtime (due to technical fault) shall not exceed seventy-two (72) consecutive hours, where this is not practicable, customers shall be duly informed by the deployer,” the regulator said.

“Helpdesk contacts are adequately displayed at the ATM terminals. At the minimum, there should be a dedicated telephone line for reporting faults and such telephone lines shall always be functional and manned.

“All ATM charges and fees are fully disclosed to customers.

“The ATMs issue receipts for all transactions, where requested by a customer, except for balance enquiry.

“Such receipts should at a minimum state, the amount withdrawn/deposited, the terminal identity, date and time of the transaction.

“Printed receipts and screen displays are legible.”

RESOLUTION ON FAILED TRANSACTIONS 

The CBN said failed on-us transactions (where the customer’s bank owns the ATM used) must be reversed instantly;

However, if technical glitches occur, banks have a maximum of 24 hours to manually reverse them.

“For not-on-us transactions (where the cardholder uses another bank’s ATM), the refund timeline must not exceed 48 hours,” CBN said.

The CBN said ATM acquirers, the institutions operating ATMs, must also reconcile and refund all funds belonging to customers in cases of partial or non-dispense errors.

“Banks are required to adopt automated mechanisms to initiate such refunds without waiting for customer complaints,” it added.

ENFORCEMENTS AND PENALTIES 

CBN said it will conduct periodic audits and on-site inspections to ensure compliance with the new standards, adding that any bank or financial institution that violates the provisions will face “appropriate penalties” as prescribed by existing regulations.

The apex bank said penalties will be imposed on institutions that fail to comply with any of the provisions of these guidelines, or any other relevant regulation issued from time to time.