Hidden Bank Charges Are Quietly Draining Nigerians’ Trust in Digital Payments

Hidden bank charges in Nigeria are eating away at consumers’ confidence in digital payments, even as the country logs record-breaking transaction volumes. Millions of Nigerians now use mobile transfers, POS machines, and internet banking daily — yet many feel blindsided by deductions they cannot explain. The frustration is real, widespread, and growing.

“You will see N50, N100, N250, and N300 popping up,” one user noted. “Before you know it, the money is gone. Most people don’t even know exactly what they are paying for.”

Furthermore, a market trader captured a sentiment shared by many: “They are talking about financial inclusion, but these charges are frustrating people. Sometimes it feels like keeping money under your pillow is better — except for the risk of theft.”

Nigeria’s Digital Payment Surge Masks a Growing Trust Crisis

Nigeria’s cashless economy is booming on paper. According to data from the Nigerian Inter-Bank Settlement System (NIBSS), the value of instant payment transactions hit N1.07 quadrillion in 2024. That marks a 78 percent jump from N600.36 trillion in 2023. The peak month was December 2024, when transactions reached N115 trillion.

Additionally, Nigerians completed 1.38 billion Point-of-Sale (POS) transactions worth N18.32 trillion that same year. Mobile money operators processed N79.5 trillion in transaction value. Meanwhile, the Central Bank of Nigeria (CBN) reports that internet-based transfers alone made up 51.91 percent of all electronic payments by volume as of June 2024.

Nigeria’s financial inclusion rate also climbed to 74 percent in 2023, up from 68 percent in 2020, according to EFInA’s Access to Finance Survey. However, experts quickly caution that rising transaction numbers don’t automatically mean rising trust.

Hidden Bank Charges In Nigeria : It’s Not Overcharging — It’s Opacity

Technology expert Obinna Adumike, speaking at Open Access Data Centre, offered a nuanced take. He argued that the problem isn’t necessarily excessive fees. Instead, it’s a severe lack of transparency.

“I wouldn’t necessarily say Nigerians are being overcharged in a strict sense,” he said. “Most customers do not even clearly understand the full list of deductions from their accounts.”

Adumike explained that many Nigerians only discover charges after printing account statements. There, they find multiple line items — transfer fees, maintenance charges, VAT, stamp duties — with little context or explanation.

“Technically, these charges are published and available,” he noted. “But the problem is not availability; it is accessibility and comprehension. There is a wide gap in financial literacy and digital understanding.”

He therefore called for a consolidated fee structure. “We should have one clear line for bank charges and another for government taxes. Everything else should fold into a predictable framework,” he said.

Moreover, Adumike pointed to fintech platforms as better models. “Platforms like Paystack or Jumia’s checkout system show full cost breakdowns before payment completes. Traditional banking apps still need to improve in this area,” he added.

He also urged the CBN to go beyond publishing guidelines on its website. He suggested partnering with agencies like the National Orientation Agency to drive financial literacy at the grassroots level.

POS Operators Bear the Brunt of Hidden Bank Charges In Nigeria

The confusion reaches far beyond regular bank customers. POS operators — who form the backbone of Nigeria’s informal cashless economy — feel the squeeze directly.

Mrs. Anna Bush, a small business owner and POS operator, said customer complaints have surged recently. “Now there is another charge on POS transactions,” she said. “We were told it is from the CBN. Transactions from N10,000 and above will attract charges. It was not like this before.”

She described a layered deduction experience that frustrates customers. “If I transfer money from my bank account to a POS account above N10,000, a charge gets deducted. Customers then complain they are already paying POS transfer fees. It feels like people pay at every stage.”

Fellow POS operator Mrs. Manuwa Samuel echoed similar sentiments. “The bank charges are not normal; we are just managing,” she said. She also noted that transfer fees have crept upward over time. “If you want to transfer N5,000, they charge N50. Before, it was N20. Now, because of tax and all that, they charge more.”

Although each deduction looks small in isolation, the cumulative impact hits low- and middle-income earners hardest — especially those who transact frequently.

Banks Earn Billions While Customers Stay Confused

Nigeria’s banks are clearly profiting from fee-based income. Eleven listed banks collectively earned N209.18 billion from account maintenance charges alone in the first quarter of 2026. That figure rose from N183.37 billion in the same period of 2025. Across the same timeframe, banks also raked in N984.47 billion from fees and commissions combined.

Under CBN regulations, charges on electronic transfers, stamp duties, VAT on banking services, and ATM withdrawal fees from third-party machines are all technically legal. However, industry analysts stress that legality isn’t the core issue — clarity is.

Most customers struggle to distinguish bank fees from statutory charges. They also find it hard to separate government levies from charges collected on behalf of payment infrastructure providers. Abbreviated descriptions on statements make the problem worse.

Dr. Uju Ogubunka, President of the Bank Customers Association of Nigeria (BCAN), acknowledged the confusion but maintained charges are regulated. “There is a document called the Guide to Bank Charges,” he said. “If you follow that document, you will see the kind of charges banks are allowed to levy.” He also encouraged customers to report any suspected overcharging for remedial action.

What Nigeria Can Learn From Kenya’s Transparent Model

Kenya’s mobile money ecosystem frequently draws praise for its pricing clarity. According to the Consultative Group to Assist the Poor (CGAP), Kenya’s regulatory framework requires mobile financial service providers to show applicable transaction charges to users before payment completes. That simple step empowers consumers to make informed decisions upfront.

Nigeria’s digital banking sector could adopt a similar pre-confirmation disclosure model. Lotus Bank’s Chief Digital Officer, Akin Adegoke, acknowledged existing gaps. “The fees customers see are regulatory or transaction-related charges guided by CBN regulations,” he said. “Still, this is an area where clarity can be improved.” He added that banks are working to deliver clearer digital alerts and better customer communication.

The Road Ahead: Trust Must Drive Inclusion

Nigeria’s digital payment infrastructure continues to grow rapidly. However, experts increasingly argue that raw inclusion numbers mean little without consumer trust. When people feel unsure about mysterious deductions, confidence erodes. In extreme cases, some may even retreat to cash — a step backward for financial inclusion goals.

The consensus among experts is clear. Transparency must come first. Banks should disclose all charges before users confirm transactions. The CBN should simplify its fee framework into plain language. And digital financial literacy campaigns must extend well beyond government websites.

Until then, millions of Nigerians will keep watching those small deductions — N50 here, N100 there — quietly adding up, and quietly chipping away at their trust.