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Wednesday 6 November 2019

My Thoughts on the N50 Stamp Duty Charge on PoS Transactions

I was on my way to the office the other day when I noticed that my car was running very low on fuel. I then decided to buy some Premium Motor Spirit (PMS aka Petrol) at the nearest petrol station along the way.

I sighted the station of one of the major fuel distributors and branched off to buy some fuel. When my turn came, I informed the petrol attendant how much fuel I wanted to buy and that I wanted to use my ATM card to pay. I then proceeded to open my fuel tank.

The attendant then made one of the most profound statements I have heard in recent times. Hear him:

‘Oga, we go charge you N50extra if na *PoS you wan use pay o!’

Whaaaatttttttt!!! I exclaimed!

I instantly got a flashback of a scenario that played out in one of the eateries I went to get some lunch. A male customer was having an argument with a female cashier at the eatery saying that he wasn’t going to pay anything extra asides the cost of the food he had bought. 

Apparently, the cashier had informed him that he would be charged N50 extra for using the POS machine. But the customer was having none of her explanations. He was arguing and shouting at the top of his voice, blatantly refusing to pay the N50 charge.

I came to and asked the fuel attendant when did ordinary Nigerians start paying to use the POS machine? With an air of confidence and a sheepish smile on his face, he pointed to a sign displayed in the station (reproduced below), whilst replying me saying:

‘Oga, na since last week o. And na new **CBN policy!’

As I wasn’t with much cash on that fateful day, I opted to use the POS machine and pay the extra N50 charge. I drove off from that petrol station questioning the way our Policy and decision-makers in Nigeria think!

For the benefit of those who may not be aware of recent happenings in Nigeria, permit me to give a background.

Nigeria is predominantly a cash-based economy though the Government has been making efforts to drive the economy to a cashless one. Many policies have been put forth to actualise this drive, the most recent being the imposition of bank charges on cash deposits and withdrawals above a certain threshold. This policy which was contained a circular titled Re:Implementation of Cashless Policy” summarised the applicable charges as:

The economy was still trying to come to terms with this policy when the CBN released another circular titled “Review of Process for Merchants Collections on Electronic Transactions” and dated 17th September 2019. The circular directed all banks to effect the following changes:
  • v unbundle merchant settlement amounts and charge applicable taxes and duties on individual transactions as stipulated by regulators.
  • v  To review Merchant Service Charge (MSC) downward from 0.75 per cent (capped at N1, 200) to 0.50 per cent (capped at N1, 000).

 This Service charge also referred to as the Stamp Duty Charge is being implemented by the banks via the Nigeria Interbank Settlement System (NIBBS).

What a policy somersault!

I'm not an Economist, but simple reasoning and logic tells me that if as a Government, your goal is to move towards a cashless society, then your policies and activities should be geared towards encouraging more people to embrace alternative electronic payment methods whilst discouraging and maybe penalizing the use of cash.

So whilst the imposition of charges on cash deposits and withdrawals seem to be in order, I cannot understand for the life of me, the introduction of charges on electronic and alternatives to cash payments!!!

What are the implications of all these big Grammar to the ordinary Nigerian who works hard and manages to earn N500,000 and wants to keep it in the bank?

If he opts to deposit it cash, he would be charged
  • v  N10,000 (or 2%) for cash lodgements
  • v  N15,000 (or 3%) for cash withdrawal

If he opts for electronic means, he would be charged
  • v  N50 for each electronic withdrawal

Imagine he chooses to withdraw in tranches of N5000 for his daily needs, it implies that he would have to forfeit N5000 in charges to withdraw or use his own money!

The Government wins either way while the ordinary Nigerian is at the receiving end of these policies. The long term impact though would be a loss of faith in government policies and complete apathy to electronic payments systems. The people would return to the ancient method of keeping their cash under their beds.

These are my thoughts on the imposition of N50 charge on the use of POS and electronic payment platforms in Nigeria. I would love to hear yours.

* PoS -  Point of Sale
*CBN - Central Bank of Nigeria


On Friday 22nd November 2019, in an interview on Channels' TV program Hard Copy hosted by Maupe Ogun-Yusuf, the CBN Governor debunked claims that N50 stamp duty charge was their directive.

While agreeing to the reduction of the Merchant Service Charge from 0.75% to 0.5%, the Governor emphatically said on the program that it did not direct the merchants to pass the charge to their customers.
Read more about it here

The narrative continues to unfold.


  1. sebi me i will soon move to Canada. lol. nice write up.

    1. Laughing.. There are no charges for using the PoS in Canada, right?


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