CBN Mandates 48-Hour Refund for Failed ATM Transactions
By Patience Ikpeme
The Central Bank of Nigeria (CBN) has issued a directive requiring all Deposit Money Banks and other financial institutions to refund customers for failed Automated Teller Machine (ATM) transactions within a maximum of 48 hours.
This move is part of a broad set of reforms designed to strengthen consumer protection and build public trust in the nation’s rapidly expanding digital financial system.
The instruction is contained in an “Exposure of the Draft Guidelines on the Operations of Automated Teller Machines in Nigeria,” released on Saturday by the apex bank. The document, signed by Musa I. Jimoh, Director of the Payments System Policy Department, has been circulated to banks, payment service providers, card schemes, and independent ATM deployers for feedback, with a deadline of October 31, 2025.
The new framework introduces strict, differentiated timelines for transaction reversals.
For “on-us” transactions—those where a customer uses their own bank’s ATM—the reversal must be instant. If technical challenges prevent an instant reversal, the bank is required to complete a manual refund within 24 hours.
For “not-on-us” transactions—where the customer uses another bank’s ATM—the refund process must be completed within 48 hours.
The circular contains a clear statement of regulatory intent: “Customers must not be made to suffer for failed transactions caused by system errors or network failures,” it reads. The CBN also requires institutions to implement technology that automatically reverses failed or partial transactions, removing the need for customers to file manual complaints.
The apex bank explained that these measures directly address widespread frustration over delayed refunds and poor service delivery, with the goal of modernizing the country’s payment infrastructure to align with global standards.
Beyond refund deadlines, the new guidelines introduce a comprehensive overhaul of ATM operational requirements nationwide.
Expansion and Coverage: Banks and card issuers are now required to deploy a minimum of one ATM for every 5,000 active cards. This will be implemented in phases, targeting 30% compliance by 2026, 60% by 2027, and full compliance by 2028. All future deployment, relocation, or decommissioning of ATMs will require CBN approval.
For security and accessibility, ATMs must be located in enclosed or well-lit areas, equipped with anti-skimming devices and CCTV cameras, and must comply with Payment Card Industry Data Security Standards (PCI DSS).
To aid the visually impaired, at least 2% of all ATMs must feature tactile symbols. Operators must ensure the machines maintain a functional helpdesk contact and keep detailed audit logs
Under Service Quality: the guidelines mandate several improvements to customer experience: ATMs must dispense cash before returning the card to reduce cash abandonment; PIN changes must be free; Only clean banknotes are to be dispensed; Operators must display clear transaction fees and issue receipts upon request for all transactions except balance inquiries; To ensure continuous service, all machines must have backup power and downtime must not exceed 72 consecutive hours. If this limit is exceeded, operators must publicly announce the cause and restoration timeline.
The CBN stated that the reforms are essential due to rising complaints about failed transactions, cyber fraud, and deteriorating service quality. Ultimately, the bank concluded: “The goal is to build a payments system that works seamlessly for everyone—urban and rural users alike.”
Stakeholders are encouraged to provide input to the draft guidelines before the final policy is adopted and takes effect, which is anticipated before the end of the year.
