Banks Shut 229 Branches as Digital Payments Accelerate

Nigeria’s banking sector closed 229 physical branches within one year as more customers shifted their daily transactions to electronic channels, particularly Point of Sale (POS) terminals.

Figures from the Central Bank of Nigeria’s 2024 financial sector statistical bulletin show that the number of deposit money bank branches nationwide declined from 5,373 in 2023 to 5,144 in 2024. This drop occurred despite an increase in the number of licensed banks, which rose from 33 to 35 during the same period.

The data, which covers commercial, merchant, and non-interest banks across all 36 states and the Federal Capital Territory, highlights a steady migration away from traditional banking halls toward electronic platforms.

POS usage recorded the most significant growth. Transaction volumes climbed from 9.85 billion in 2023 to 13.08 billion in 2024, representing an increase of about 33 per cent. Even more notable was the surge in transaction value, which rose from ₦110.35 trillion to ₦223.27 trillion, an increase of over 100 per cent.

ATM usage also grew, but at a much slower pace. Transaction volumes rose marginally from 1.01 billion to 1.02 billion, while the value of transactions increased from ₦28.21 trillion to ₦29.12 trillion.

These trends underscore the growing importance of POS terminals and digital channels in consumer payments, surpassing cash withdrawals and in-branch transactions.

Branch closures were unevenly distributed across the country. Lagos State remained the nation’s banking hub with 1,521 branches in 2024, although this reflected a decline of 11 branches from the previous year. Despite the reduction, Lagos still had far more branches than any other state.

Ebonyi State recorded the sharpest decline, losing 89 branches as its total fell from 120 to 31. Significant reductions were also recorded in Oyo, Niger, Ekiti, and Ondo states. Anambra, Ogun, Cross River, Plateau, and the Federal Capital Territory also experienced notable closures, indicating that the contraction was not limited to rural areas alone.
However, some states saw growth in bank presence. Delta and Rivers states added new branches, while Edo, Kaduna, Kano, Katsina, Adamawa, Jigawa, and Kogi recorded modest increases. These gains suggest that expansion is now more targeted, following areas with rising commercial activity or population growth.

Analysts note that Nigeria’s financial system is undergoing rapid change, driven by technology adoption, regulatory shifts, and evolving customer expectations. Rising inflation has also made customers more sensitive to bank charges, service reliability, and transaction security.

Recent industry surveys indicate that as more Nigerians rely on digital channels and POS terminals, expectations around speed, transparency, and efficient problem resolution have increased. While trust remains central to public confidence in banks, tolerance for failed transactions and service delays is steadily declining.

The expansion of agent banking networks, mobile wallets, and informal retail payments, alongside periodic cash shortages, has further accelerated the move toward POS-based transactions. These developments continue to reshape how financial services are accessed and delivered across the country.