Nigeria’s Banks Scale Down Branch Banking as POS Takes Over — 229 Branches Shut

Nigeria’s banking industry is undergoing a decisive structural shift, as traditional branch banking steadily gives way to digital and agent-led financial services. In just one year, 229 bank branches were shut nationwide, underscoring a rapid migration away from brick-and-mortar operations toward Point-of-Sale (POS) platforms and electronic payment channels.

The development reflects a banking system recalibrating to new consumer behaviours, cost pressures, and technology-driven competition, rather than a contraction of financial activity.

Fewer Branches, More Banks

Data from the Central Bank of Nigeria’s Financial Sector Statistical Bulletin shows that the number of deposit money bank branches declined from 5,373 in 2023 to 5,144 in 2024, even as the number of licensed banks rose from 33 to 35 during the same period.

This divergence highlights a clear reality: growth in Nigeria’s banking sector is no longer tied to physical expansion, but to digital scale and distribution efficiency.

POS Emerges as the New Payment Backbone

The most striking indicator of this shift is the explosive growth in POS usage:

• Transaction volume surged from 9.85 billion to 13.08 billion, a 33% increase
• Transaction value more than doubled from ₦110.35 trillion to ₦223.27 trillion
• POS growth far outpaced ATM usage, which recorded marginal volume growth of less than 1% and modest value expansion

These figures confirm that POS terminals have become the dominant interface for everyday financial transactions, surpassing both bank branches and ATMs in relevance.

Uneven Geography of Branch Closures

The retreat from physical banking has been uneven across the country.

• Lagos State remains Nigeria’s banking hub with 1,521 branches, though it still recorded a net decline.
• Ebonyi State experienced the sharpest contraction, losing the majority of its branches in a single year.
• Other states including Oyo, Niger, Ekiti, Ondo, Anambra, Ogun, and the FCT also recorded notable reductions.

Conversely, select states such as Rivers, Delta, Edo, Kaduna, and Kano added branches, signalling that banks are now strategically concentrating physical presence in high-density commercial corridors rather than pursuing nationwide branch coverage.

Why Banks Are Pulling Back

Several forces are driving this recalibration:

• Rising operational costs amid high inflation
• Increased customer preference for proximity and speed over in-branch service
• Rapid expansion of agent banking and fintech-led payment ecosystems
• Persistent cash scarcity episodes that accelerated behavioural change
• Pressure on banks to improve efficiency and reduce fixed overheads

For banks, physical branches are increasingly viewed as high-cost assets with declining marginal utility, while POS networks offer scalable, low-cost access to customers.

Fintech Pressure and Changing Customer Expectations

As banks scale down physical infrastructure, fintech platforms and agent networks have entrenched themselves as primary channels for retail payments, informal trade, SME transactions, and daily cash access.

Customer expectations have also evolved. Speed, uptime, transparency, and dispute resolution now define trust more than physical presence. Tolerance for failed transactions, long queues, and service bottlenecks has sharply declined.

This has placed traditional banks under growing pressure to modernise legacy systems, improve service reliability, and compete more effectively on digital experience.

What the Shift Really Means

The closure of 229 bank branches does not signal a weakening banking system. Instead, it marks a reconfiguration of how financial services are delivered in Africa’s largest economy.

Branches are being repositioned as:

• Corporate and high-value transaction centres
• Advisory and relationship hubs

Meanwhile, POS terminals and digital platforms have become:

• The backbone of retail payments
• The engine of financial inclusion
• The frontline of Nigeria’s cash-lite economy

BRANDECONOMY Take

Nigeria is not abandoning banking halls by accident. It is rewriting the architecture of finance, one POS terminal at a time.

The future of Nigerian banking will be defined less by how many branches banks own—and more by how reliably, securely, and inclusively they connect people to money.

---