Just imagine walking up to your local POS agent to withdraw cash, only to be told, “Sorry, I’ve reached my limit – please come back tomorrow.”
This is the new reality for Nigeria’s agency banking.
In December 2024, the Central Bank of Nigeria (CBN) introduced a rule limiting daily withdrawals to ₦1.2 million per POS agent.
The goal is to increase digital payments and reduce fraud, but this “rule” has unexpectedly changed many busy shops, often called “human ATMs,” into places where cash services can come to a halt.
Both agents and customers are now trying hard to adjust and figure out how to manage under this new cash limit.
Agents as ‘Human ATMs’… Until Now
Long before the cap, agency banking in Nigeria focused mainly on cash withdrawal services.
In 2024, Nigerians withdrew a massive ₦18 trillion using POS terminals. This was a 69% increase from the previous year, with around 1.5 billion transactions taking place.
The network driving this firehose of cash is huge: by 2022 Nigeria had roughly 1.5 million banking agents (POS and mobile money) nationwide. Fintech companies like OPay, Moniepoint and PalmPay raced to build agent networks (hundreds of thousands of agents each).
What did this mean for agents’ bottom lines?
Simply put, cash withdrawals were the bulk of business.
Customers used agents like mini-branches or neighborhood ATMs and these agents earned most of their income from withdrawal fees (they typically keep about 80% of the commission on a cash-out).
For example, if a customer paid a 1% fee on a ₦100,000 withdrawal (₦1,000 fee), the agent might pocket around ₦800. At scale, those commissions add up – agents in cities could easily process millions per day.
Even the broad agent footprint was uneven: Lagos alone accounted for 29% of all agents in Nigeria.
Rural areas had far fewer agents, who in turn often charged higher fees to cover their costs.
In short, agents’ business model was built on rapidly moving cash out to people.
The New Rules of the Game
Starting mid-December 2024, major changes were made to the system.
The CBN’s new circular – signed by Oladimeji Taiwo (Payments System Management) – mandated per-customer and per-agent caps.
These new guidelines set limits on money withdrawals for both customers and agents.
Each customer can withdraw a maximum of ₦100,000 per day and ₦500,000 per week through any agent. Additionally, agents are restricted to dispensing no more than ₦1.2 million in total cash each day.
In other words, when an agent distributes ₦1.2 million on a given day, they have to stop giving out cash. All agents are required to stick to this limit, and transactions must be done through specific “agent float” accounts.
The Central Bank of Nigeria (CBN) says the aim is to get more people to use electronic payment methods and cut down on fraud in agency banking with these rules but this limit has significantly affected agents who depend on cash withdrawals for income.
Consider the math: an agent handling transactions worth ₦1.2 million daily with a 1% cash-out fee can now only earn about ₦9,600 to ₦12,000 per day, assuming they keep 80% of the fee.
Before the limit, some agents in big cities like Lagos easily earned over ₦20,000 daily from just cash withdrawals. By midday, they might have met their daily limit and then had to close for the day.
Even smaller agents, who never reached the ₦1.2 million mark in transactions, are feeling the effects. This is because once the system-wide threshold is met, banks might stop supplying them with more cash.
In other words, this cap has become a new constraint on the earnings of agents.
Squeezed Margins and New Hustles
In response, many agents are hustling to diversify. With cash-out curtailed, they are pushing other services more aggressively.
Bill payments and selling airtime—Although these only offer small commissions, they help keep money flowing.
Deposits—even though commission is minimal, it maintains transaction volume.
However, there’s a risk when agents focus too much on “cash-in” services that can drain liquidity, as EFInA warns: agents accepting a flood of deposits without corresponding withdrawals can end up short of physical cash when customers do want to pull out.
Cue Supply Smart
Cash limits can make it difficult for agents to assist their customers smoothly, but here comes the Supply Smart POS to turn these challenges into opportunities.
Agents can expand their services beyond basic transactions, becoming essential in their communities.
- Flight Tickets and Road Transport Services
As an agent, with the Supply Smart POS you can sell flight tickets for major airlines like Air Peace, Arik Air, and Virgin Atlantic. You can also offer tickets for local bus journeys. This makes agents a convenient place for all travel needs, earning steady income even when cash withdrawals are low.
- Micro Insurance & HMO for Customers
Transitioning beyond financial services, agents can now offer micro-insurance and health plans. This can come as a shocker but you can do this with the Supply Smart POS as well.
These affordable health options give customers peace of mind, helping them manage unexpected medical expenses. For agents, it strengthens customer relations and broadens service offerings.
By offering these valuable services, agents can reduce the impact of cash limits and establish themselves as crucial community members.
Basically the Supply Smart ensures agents remain competitive, resourceful, and adaptable regardless of changing regulations.
Liquidity Lockdown
All of this cap talk intensifies Nigeria’s agent liquidity crunch. Agency banking thrives on “cash where and when,” but the cap means once the system hits its daily max, everyone is out—customers and agents alike.
Before 2024, agents managed by frequently visiting banks or using “master agent” networks to get more cash. In other mobile-money markets, they use special super-agents and escrow accounts to ensure no location runs out of money.
With the new limit of 1.2 million, when the system reaches this limit in a day, agents can’t process more transactions.
Agents who usually handle more customers during weekends or busy seasons can’t save that extra demand.
There’s another issue too: if too many customers deposit money instead of withdrawing it, agents can soon run out of e-float, the electronic value needed to pay out money.
EFInA highlights that if agents offer too many deposit or bill services, they might run low on cash if they don’t manage it carefully. In short, agents need to balance their cash more quickly and have less room for error.
Regulatory & Tech Pressures
The cap is part of the larger Payment System Vision 2025 plan, which calls for stricter Know Your Customer (KYC) checks, daily float account reports, and complete data encryption.
Small operators without robust tech struggle under these mandates.
Africa’s Other Headwinds: Power, Network and Reach
Infrastructure issues are a major challenge for agents in Nigeria. The power supply is often unreliable, so many have to use petrol generators to keep their POS terminals and phones running.
When the power goes out or the internet fails, transactions come to a halt. According to an African survey, aside from money supply issues, the main reasons agents lose customers are network or system problems.
In Nigeria, weak or dropped mobile signals during a sale often mean failed transactions, which can upset customers and cut into the agent’s daily earnings. Besides spending on fuel, agents pay monthly fees to stay connected online.
A 2018 study showed that typical mobile-money agents spend about ₦45,000 ($100) per month on these expenses.
Now, consider if an agent’s income suddenly shrinks by two-thirds because of new limits, but the costs remain the same.
However, Supply Smart helps mitigate this by providing SIM cards with unlimited data on reliable networks on their POS machines.
The Urban–Rural Divide
In Lagos, where 29% of agents operate, and in Abuja, agents face challenges due to the ₦1.2 million daily limit.
Once they reach this cap, they can’t conduct further transactions that day, which inhibits their ability to earn more.
In the farther regions, it’s rare for agents to reach that limit, but the cap still prevents any chance of having a highly profitable day, slowing down business expansion.
What’s Next? Provocations & Predictions
The cap isn’t going anywhere soon. Regulators might tweak limits dynamically—raising them in rural zones or for agents enrolled in certified programs. You may even see “super-agents” providing float to clusters of retail agents (a model in other African markets).
Meanwhile, agents aligned with platforms like Supply Smart—who leverage free data, flat-fee virtual accounts, micro-insurance, and seamless travel services—will be best positioned to outlast this squeeze.
Here’s a thought to leave you with: agency banking was built on the promise of cash ubiquity; now that cash is capped, agents who become full-service digital hubs—not just dispensers of naira—will define the next chapter.
By connecting with the right partners, agents can turn the current cash restrictions into opportunities for innovation and growth.
