70% Nigerians want cancellation of the new ATM charges-BRIU Poll

In continuation of its mandate as the research arm of BusinessDay newspaper, BusinessDay Research and Intelligence Unit (BRIU) went to town to seek the opinions of Nigerians who were randomly selected from all walks of life on the recent policy of the Central Bank of Nigeria (CBN) on ATM usage.

The new CBN policy

On Wednesday 13, 2014, the Central Bank of Nigeria (CBN) reintroduced charges on withdrawals on ATM machines of other banks. The policy will become operational from September 1, 2014. Based on the CBN release, customers are to pay N65 on the forth withdrawal on ATM machines other than the banks they have accounts with. The new policy is not exactly the same as the old policy on two grounds. Firstly, the new charge is N65 as against N100 that was charged before. Secondly, bank customers are to start paying the new charges beginning from the fourth transaction compared with every transaction as in the old system. All the ATM cash withdrawals on ATM machines of the card issuers still remain free.

Whose opinions did we seek?

We sought the views of Nigerians from 17-59 years of age. Three percent of the population were 17yrs or younger; 5% between 18-20yrs; 43% between 21-29yrs; 32% between 30-39yrs; 13% between 40-49 yrs while 5% were between 50-59 yrs of age. Overall, 64% were male while 36% were female.

 

Source: BRIU Poll

To ensure representation of all the six geopolitical zones, we visited some ethnic clusters in Lagos State. In that regard, 3 percent of the respondents came from the North West; North East 5%; North Central 2%; South West 52%; South-South 13% while South East had 25% of the whole respondents.

Furthermore, 8 percent were unemployed; civil servants constituted 15%; those in educational and related institutions accounted for 12%; media, 15%; judiciary,2%; telecoms, 7%, banking & insurance, 11%; business/sole trader, 19% and transport, 11 percent. In addition, 15 had minimum of secondary school certificate, 64% BSc/HND, 13% M.Sc/PhD while others such as ND/NCE constituted 8%.

Are you aware of the new CBN policy on ATM withdrawals?

This was our first question. Amazingly, 87% of our respondents across all groups answered in affirmative. Majority of them even specified the take-off date of the new policy. Only 13 percent claimed not to be aware of the policy on ATM charges. There is a very high correlation between the level of awareness and educational attainment in the sense that 94% of the M.Sc/PhD holders said they were aware of the policy. Also, 91% of the BSc/HND holders said yes; 72% of school certificate holders answered in affirmative while 73% of those whose qualifications were classified as others also answered yes.

Across all the income groups, 90% said they were aware of the policy while 10% said no. Specifically, 83% of those who earn less than N50,000 monthly responded that they had heard about the policy; 94% of those in income group N50,000-N100,000 are aware; 94% of Nigerians in income group N100,000-N150,000 also said yes; everyone in income group N150,000-N200,000 are aware; 88% of those within the income group N201,000-N250,000 said yes.

Will the new policy affect the way you use other banks’ ATM machines?

On the average, 81% said yes while 19% said no. However, the degree varies across the six geopolitical zones.  All the respondents from the North-East zone unanimously said yes. The next highest level of yes came from the South West where 83% of the respondents said yes. 80% from South-South; 78% from South-East and 75% percent from North-East all said yes, that the new policy will affect the way they use the ATM machines of banks different from the card issuers.

Do you support the new policy?

Overall, only 23% said yes while 77% said no. Meanwhile, all but one of the geopolitical zones were against the new policy. The highest opposition to the new policy came from the north east where 83% of the respondents are not in support of the new policy. The south west, with 81% of the respondents saying no followed the north east in ranking. Next in line is the south east where 78 percent said no just as 69% and 67% of south-south and North West said no respectively. Respondents from the north central sharply disagreed with their colleagues from other geopolitical zones as only 33% of them said no while 67% said yes that they supported the new policy of the CBN.

How many times did they withdraw cash weekly?

The reactions to the new policy may not be unconnected with the number of times they withdraw cash from ATM weekly. When asked how many times they withdraw cash from ATM machines weekly, 20% said they withdraw cash once a week; 24% twice a week; 17% three times a week; 10% four times a week; 9% five times a week while 19% withdraw more than five times a week.

Are you aware of other payment channels?

Three percent of the respondents skipped this question. However, 81% said yes while 16% said no. This should not be surprising as 45% of respondents don’t use other windows the financial system offers Nigerians. Furthermore, 20% have never used these channels while only 31% use channels such as internet banking, online transactions, POS, etc, very often.

What do you want the CBN to do now on ATM charges?

The essence of this question is to convey the feelings of Nigerians to the regulatory authority. Our survey shows that 73 out of every 100 Nigerians want the CBN to return to the era when no charges were collected from customers using other banks’ ATM machines. Put differently, 73 percent want the CBN to cancel the new policy; 11 percent want the policy to be sustained while 16 percent want the CBN to reduce the charges further. According to the Nigerian inter-bank Settlement System (NIIBSS), then value of online transactions rose from $314m in 2010 to $488m in 2012. It was estimated by analysts that the value would have further increased to about $630m by 2013 year end.

Not all bank customers use ATM cards

In the course of administering the questionnaires, we ensured that only those who have and regularly use ATM cards were sampled. However, we took our time to find out why some bank customers do not use ATM cards. Major reasons cited by these people include fraud and delay in resolution of problems associated with the use of ATM machines such as non-dispensing of cash when the customers’ accounts have been debited.

What these people are not aware of is that the commercial banks in the country, the Nigerian Deposit Insurance Corporation (NDIC) and Central Bank of Nigeria (CBN) have all intensified efforts to protect customers’ deposits within the banking system.  There is need for more sensitisation in this regard.

 

BusinessDay Research and Intelligence Unit (BRIU)