CBN Mandates Banks To Refund Failed ATM Transactions Within 24 Hours

The Central Bank of Nigeria (CBN) has unveiled fresh draft guidelines that will compel banks to issue prompt refunds for failed Automated Teller Machine (ATM) transactions in a move aimed at enhancing consumer protection and restoring public confidence in electronic banking.

According to the circular issued on October 9, 2025, and signed by the Director of the Payments System Policy Department, Musa I. Jimoh, the apex bank directed all deposit money banks, payment service providers, card schemes, and independent ATM operators to comply with the new standards.

Stakeholders are expected to submit their feedback by October 31, 2025, ahead of the final adoption of the policy.

The proposed framework introduces a strict timeline for resolving failed transactions. For on-us transactions, those conducted by a customer on their own bank’s ATM, refunds are expected to be processed immediately.

However, if system challenges prevent instant reversal, the bank must complete the process within 24 hours. For not-on-us transactions, where a customer uses another bank’s ATM, the maximum refund period has been pegged at 48 hours.

To further protect customers, the guidelines direct ATM acquirers to implement systems that automatically initiate refunds without waiting for customer complaints. The CBN said acquirers must also ensure that all funds from failed or partial cash withdrawals are reconciled and refunded promptly to affected customers.

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The apex bank explained that the measures are part of its broader effort to promote efficiency, transparency, and accountability in the nation’s financial system.

“This initiative is aimed at improving consumer trust and reducing the frustration often experienced by customers following failed electronic transactions,” the circular stated.

The CBN’s new directive forms part of a comprehensive review of the existing regulatory framework for ATMs, replacing the 2020 electronic payments guidelines.

The review, according to the bank, became necessary due to the rapid transformation of Nigeria’s digital payments landscape, the emergence of new technologies, and increasing risks associated with electronic transactions.

Under the new provisions, banks and card issuers are required to deploy one ATM for every 5,000 cards issued, with implementation spread over three years: 30 per cent by 2026, 60 per cent by 2027, and full compliance by 2028. Any plans for deployment, redeployment, or decommissioning of ATMs will henceforth require CBN’s prior approval.

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The guidelines also introduce higher operational standards for ATMs. Machines must now comply with Payment Card Industry Data Security Standards (PCI-DSS), maintain detailed audit logs to facilitate dispute resolution, and display clear card orientation symbols to prevent transaction errors.

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