Historical timeline: How PoS agents became Nigeria’s real banking system

The numbers tell a story that Nigeria’s banking industry would prefer to ignore. By March 2025, the country had 5.90 million active Point of Sale (PoS) terminals processing transactions worth 4.87 billion naira every hour. In the same period, active ATMs had fallen to 16,714 machines, down from 17,377 in just six months.

The math is brutal.

Nigeria now has one POS terminal for every 26 citizens, compared to just 14 ATMs per 100,000 adults. The infrastructure of formal banking has been rendered obsolete not by policy or strategy, but by the sheer force of market demand meeting technological capability.

The transformation happened with stunning speed. POS transactions surged from 2.62 trillion naira in the first quarter of 2024 to 10.51 trillion naira in the first quarter of 2025, representing a 301.67 per cent growth yearly.

For the full year 2024, POS terminals processed 18 trillion naira across 1.5 billion transactions, up 69 per cent from the 10.7 trillion naira recorded in 2023. These are not marginal shifts in payment behaviour.

They represent a wholesale replacement of traditional banking infrastructure with an agent-based cash distribution network that operates largely outside the formal banking sector.

The contrast, traditional banks compete on presence. Nigeria’s largest bank by branches, First Bank of Nigeria, operates 820 locations globally, serving over 43 million customers. Access Bank, the largest by assets, maintains 740 branches across Nigeria and Africa.

United Bank for Africa operates through approximately 1,000 branches with over 3,000 ATMs. Zenith Bank has 454 branches globally.

The entire formal banking sector combined operates fewer than 7,000 branches nationwide, with the 10 largest banks accounting for the vast majority of that footprint.

Against this, the agent banking network has deployed 5.90 million active terminals, a figure that represents more than 350 times the number of ATMs and nearly 1,000 times the number of bank branches.

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The rise of PoS terminals in Nigeria

Nigerians are not simply using POS terminals alongside traditional banking channels. They are actively abandoning ATMs in favour of agents who can provide cash on demand without the queues, downtime and empty machines that have plagued bank infrastructure.

The agent revolution was enabled by three fintech companies that moved aggressively to capture the market.

• Moniepoint currently processes approximately 42 per cent of Nigeria’s total POS transaction volumes through a network of more than 400,000 active agents spanning all 36 states.
• Opay ranks second with 25 per cent market share and over 563,000 agents concentrated in major urban centres like Lagos, Abuja and Port Harcourt.
• Palmpay holds 18 per cent of the market with more than 500,000 agents as of mid-2023, having expanded rapidly in retail and small business segments.

Together, these three fintech entities control roughly 85 per cent of Nigeria’s agent banking ecosystem, a level of market concentration unmatched in any segment of the formal banking sector.

The speed of their expansion reveals how thoroughly they outmanoeuvred traditional banks.

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The good and the ugly: impact of the PoS economy

The financial inclusion impact has been profound.

A 2023 survey by Enhancing Financial Innovation and Access found that 36 per cent of Nigerian adults used a POS agent for deposits or withdrawals in the previous year, while formal bank branch visits dropped sharply after 2020.

Agents have extended financial services to approximately 11 million Nigerians who were previously unbanked, reaching populations in rural and peri-urban areas where banks have never established a presence.

The data shows 80 per cent of retail payments under 5,000 naira are still made in cash as of mid-2025, but POS terminals have become the primary mechanism for converting digital balances into physical currency.

Yet, this displacement of traditional banking infrastructure has created complications that reveal the systemic importance agents now hold. Currency in circulation surged from 982.1 billion naira in February 2023 to 5.01 trillion naira in June 2025, with 89.76 per cent held outside the banking system.

The Central Bank of Nigeria’s acting director of currency operations acknowledged in 2024 that cash, which would normally flow through formal banking channels for processing and reissuance, is being held by POS operators.

This hoarding of liquidity undermines monetary policy tools like the cash reserve ratio and lending rate, giving the CBN limited visibility into money supply and limited ability to influence credit conditions.

Then, the fraud statistics underscore the risks inherent in a system that grew faster than regulatory oversight could adapt.

Nigeria Inter-Bank Settlement System data shows that POS channels accounted for 26.37 per cent of all fraud incidents in 2023. Fraud attempts via agent channels jumped from 9 billion naira in 2021 to over 22 billion naira in 2023.

In the second quarter of 2024 alone, reported fraud losses surged to 28 million dollars from 1.9 million dollars in the first quarter, a fourteen-fold increase that suggests the problem is accelerating rather than stabilising.

The regulator’s bid to stem the tide

These vulnerabilities prompted the CBN to impose increasingly stringent controls. In December 2024, the apex bank set a 1.2 million naira daily transaction cap for each agent and a 100,000 naira daily withdrawal limit per customer, with a 500,000 naira weekly cap.

In August 2025, regulators required all POS terminals to operate within a 10-meter radius of their registered addresses, effectively ending mobile agent operations.

Following that, in October 2025, the CBN issued comprehensive new guidelines mandating that agents choose exclusive relationships with a single principal institution by April 1, 2026, eliminating the common practice of operating terminals for multiple fintech platforms simultaneously.

Central Bank Governor, Olayemi Cardoso

The exclusivity rule represents the most dramatic regulatory intervention yet, forcing agents who currently work with multiple fintech entities to consolidate with a single provider.

The policy aims to improve traceability, reduce oversight gaps, and curb fraud, but it will compel Moniepoint, OPay, PalmPay, and traditional banks to compete directly for agent loyalty. Critics warn the rule could reduce competition, limit customer choice and strain rural access to financial services, particularly if smaller agents are unable to secure partnerships with dominant players.

This regulatory upgrade acknowledges what market data has already demonstrated.

The agent network is no longer an alternative to formal banking. It is the primary mechanism through which millions of Nigerians access cash, make payments and conduct daily financial transactions.

Read also: 5 big changes PoS operators must know about CBN’s new agency banking rules