The Nigerian banking landscape is undergoing a significant transformation, revealing why banks are closing branches in Nigeria. Recent Central Bank of Nigeria (CBN) data shows a substantial reduction in physical bank branches nationwide. This strategic contraction is primarily driven by the exponential surge in electronic payments, particularly through Point of Sale (POS) terminals, which have rapidly become the preferred transaction channel. This shift underscores a broader move towards digital financial services, fundamentally reshaping how banking operations are conducted and accessed.

The answer to why banks are closing branches in Nigeria is primarily due to the overwhelming adoption of digital payment channels like POS terminals. This shift allows banks to adapt to customer preferences, reduce operational costs of physical branches, and leverage agent banking networks for wider, more convenient service delivery.

Statistical evidence compellingly supports this digital migration, especially when examining POS vs ATM transactions Nigeria. POS transaction volume increased 33 percent year-on-year, from 9.85 billion in 2023 to 13.08 billion in 2024. More strikingly, the value soared from N110.35 trillion to N223.27 trillion, doubling in a year. ATM usage saw modest growth but lagged significantly, indicating a clear preference for POS terminals over traditional cash withdrawals. This stark difference directly influences why banks are closing branches in Nigeria and the shift in their operational focus.

This contraction in branch networks, a key

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