Bank Deductions: How hidden charges erode Nigerians’ trust in digital payments
By Juliet Umeh
Nigerians are expressing growing concern over bank charges as many customers report unexpected deductions related to digital payment transactions.
Elizabeth Akpan, a contributor to a local financial scheme, recently recounted her frustrations after reviewing her bank account statements. “I was shocked by how much I’m losing to bank charges,” she told Saturday Vanguard.
Akpan described a troubling experience while using her bank’s app, noting a host of charges, including SMS alerts and various transaction fees. “You see N50, N100, N250, and N300 popping up. Before you know it, the money is gone,” she said, emphasizing that many customers are unaware of the specific reasons behind these charges.
This sense of frustration extends beyond individual accounts. Akpan raised concerns about the overall transparency of the banking system, suggesting that excessive fees could undermine public confidence in formal financial institutions. “With all these charges, sometimes it feels like keeping cash under your pillow is a better option,” she reflected.
As the Nigerian government and financial institutions promote digital payments, there is a parallel rise in skepticism towards the infrastructure designed to support these transactions. Data from the Nigerian Inter-Bank Settlement System (NIBSS) indicated that the value of instant payment transactions climbed to a staggering N1.07 quadrillion in 2024, a 78% increase from the previous year. Similarly, Nigerians made 1.38 billion Point-of-Sale (POS) transactions valued at N18.32 trillion in the same period.
While the surge in digital payments aligns with Nigeria’s financial inclusion goals—reported to have risen to 74% in 2023—experts warn that increased transaction volumes do not equate to enhanced consumer trust.
Obinna Adumike, a technology expert, argued that the problem lies not in overcharging but in a lack of understanding and clarity around charges. “Many customers only realize what they’re being charged when they review their statements,” he said. He urged financial institutions to improve the transparency of their fee structures and to educate customers more effectively.
Adumike suggested that banking apps should explicitly disclose all fees associated with a transaction before users confirm payments, similar to practices seen in many fintech platforms. “The issue is about clarity,” he stated, stressing that misunderstandings about charges could deter individuals from using formal banking services.
The complaints regarding fees also resonate with Point-of-Sale operators, who face increasing pressure from customers concerned about transaction charges. “People complain about deductions at every stage of a transaction,” noted Anna Bush, a small business owner. “Now there’s an additional charge for transactions over N10,000, which wasn’t the case before.”
The banking sector appears to rely heavily on fee-based income. Recent financial disclosures indicated that 11 listed Nigerian banks generated approximately N209.18 billion from account maintenance charges in the first quarter of 2026, a noticeable increase from the previous year.
Although many deductions occur within regulatory guidelines set by the Central Bank of Nigeria (CBN), analysts note a significant gap in customer understanding. Consumers often struggle to differentiate between fees related to government regulations and those imposed by banks themselves.
Consumer advocates emphasize that while the legality of these charges might be established, communication around them frequently falls short. Many customers only realize deductions post-transaction, often leading to confusion.
In contrast, Kenya’s mobile money ecosystem is often referenced as a benchmark for pricing transparency, with regulatory mandates requiring service providers to disclose applicable fees before transactions are completed.
Dr. Uju Ogubunka from the Bank Customers Association of Nigeria (BCAN) insisted that while some charges might seem excessive, most are legitimate under the CBN’s regulations. He encouraged customers to be proactive in understanding their bank’s fee structures.
Akin Adegoke, Chief Digital Officer at Lotus Bank, acknowledged a gap in communication regarding charges while emphasizing that most fees are tied to regulations. He affirmed that banks are working to enhance transparency in customer communications.
As Nigeria’s digital payment landscape evolves, experts contend that fostering trust through greater transparency and consumer education will be essential for promoting sustained financial inclusion. Without addressing concerns about unclear charges and insufficient understanding of deductions, faith in the digital financial ecosystem may further erode.
This report is supported by the DPI Africa Journalism Fellowship Programme of the Media Foundation for West Africa and Co-Develop.
