Soothing news has come the way of Nigerians as the Central Bank of Nigeria (CBN) has released a draft guideline on Automated Teller Machine (ATM) operations, compelling banks to refund customers for failed transactions within a strict timeframe.
Under the new framework, customers must be refunded for failed interbank (not-on-us) ATM transactions within 48 hours, while reversals for failed transactions on the same bank’s machine (on-us) must be done instantly. Where an instant reversal is hindered by technical issues, a manual reversal must be completed within 24 hours.
The directive, part of ongoing reforms to strengthen the reliability and safety of the country’s payment systems, was contained in a circular titled “Exposure of the Draft Guidelines on the Operations of Automated Teller Machines (ATMs) in Nigeria”, signed by Musa Jimoh, Director of the Payments System Policy Department.
The CBN said the document, which has been circulated to banks, other financial institutions, and payment service providers, is being exposed for public consultation and stakeholder feedback for a four-week period.
“This draft is part of the Bank’s continuous efforts to strengthen reliability, safety, and consumer confidence in the Nigerian payments ecosystem,” the apex bank stated.
According to the CBN, the key objectives of the guideline include setting minimum operational standards for ATM deployment and maintenance, improving access to ATM services in both urban and rural areas, enhancing consumer protection, and aligning local operations with global best practices. The document applies to Deposit Money Banks, Independent ATM Deployers, Card Schemes, Payment Service Providers, and the general banking public.
The guidelines require ATM deployers to guarantee user safety and transaction confidentiality. Every ATM must be equipped with surveillance cameras that record all activities around the machine, such as card insertion, transaction selection, and cash withdrawal, but must not record customers’ keystrokes for privacy reasons. The cameras must be discreetly installed to prevent tampering or removal. ATMs located outdoors must be securely bolted and enclosed within protective structures to prevent unauthorised access or theft.
“ATMs must guarantee both the safety and confidentiality of users,” the circular emphasised, warning that operators will be held accountable for any negligence that compromises customer security.
The CBN also underscored transparency in customer charges, insisting that all fees and costs associated with ATM transactions must be clearly displayed before completion. Every transaction, except balance inquiries, must generate a receipt or display confirmation showing details such as the amount, terminal ID, and transaction time. Each ATM must also display a functional helpdesk contact, including a dedicated and constantly monitored telephone line, for users to report issues.
To ensure reliability, the CBN directed that ATM downtime must not exceed 72 consecutive hours. In situations where a machine remains out of service beyond that period, customers must be promptly informed of the reasons for the outage. Operators must also ensure continuous cash availability, avoid loading unfit currency notes, and maintain online monitoring systems to track vault balances and identify failed transactions.
One of the most striking provisions in the guideline is the requirement for automatic refunds. The CBN said ATM acquirers must have systems capable of initiating refunds for failed or partial dispenses automatically, without waiting for customers or issuing banks to raise complaints. “Customers must not be made to suffer for failed transactions that occur due to system errors or network failures,” the Bank declared.
To further enhance security, ATM encryption keys must be changed at least once a year, and the same key must not be used across multiple machines. The CBN also directed that ATMs should now be configured to dispense cash before returning the card. This, it said, will help reduce instances of customers forgetting their cash or leaving their cards behind. Acquirers must disable the cash-retract function and display this adjustment on the machine screen.
Other provisions include the installation of anti-skimming devices to curb card fraud, provision of paper disposal bins at ATM sites, and backup power systems to ensure uninterrupted service. ATMs must also provide PIN change functionality at no cost to customers. Deployers are required to carry out regular inspections of their machines, maintain maintenance records, and ensure both the ATMs and the cash within them are insured. They must also maintain a national register of all ATMs under their control, indicating the location, identification, and serial number of each unit.
“ATM operators must take full responsibility for the safety, efficiency, and continuous operation of their machines,” the circular stated, adding that the new rules will ensure accountability and improve service delivery.
The apex bank explained that the draft guideline was developed to address growing customer complaints, persistent transaction failures, and declining service quality across the banking sector. It said the measures are aimed at improving the overall customer experience and building public trust in electronic payment systems.
“The goal is to build a payments system that works seamlessly for everyone, urban and rural users alike,” the Bank noted.
The CBN has invited all stakeholders, including banks, independent deployers, payment service providers, and members of the public, to review the draft and submit comments to the Director, Payments System Policy Department. It said inputs received during the consultation will help finalise a robust framework that balances technological innovation, consumer protection, and operational efficiency.
– SUN