On May 6, 2024, CBN released a circular, introducing a new electronic transaction charge: the “Cybersecurity Levy”. The circular mandates Nigerian banks to charge a 0.5% fee on electronic transactions from mobile banking applications. The CBN says this new charge will take effect from May 20, 2024.
Why is this happening?
The groundwork was laid down in June 2018 and October 2018 CBN circulars on the compliance with the Cybercrimes (Prohibition, Prevention, etc) Act 2015. At the time, the levy was pegged at 0.005% of every electronic transaction However, this wasn’t enforced in 2018 or the years that followed.
Fast forward to 2024, the same act was amended as the Cybercrime (Prohibition, Prevention, etc) Act 2024, and the cybersecurity levy was increased to 0.5%. This time, the CBN is asking Commercial banks, fintechs, payment service providers, and other financial institutions to follow this rule. But there are a few exceptions including:
- Transfers within the same bank.
- Salary payments
- Loan repayments, and
- Tuition payments
What does this mean?
When this goes into effect in two weeks, Nigerians will pay ₦5 on every ₦1,000 they transfer out of their account via electronic channels.
An electronic transfer of ₦1,000,000 will attract a ₦5,000 levy, and so on.
An important context to note is that the “Cybersecurity levy” will be in addition to existing charges Nigerians already pay for transactions. Perhaps, this is a good time to look at some of them. They include:
Transfer fee
Here, ₦10 is charged on transactions below ₦5,000.
Transactions between ₦5,001 and ₦50,000 attract a ₦25 charge and transactions above ₦50,000 attract a ₦50 naira charge.
Stamp duties
₦50 naira is charged on every transaction between ₦10,000 and ₦100, 000
Short Messaging Service
Customers who receive “alerts” from their bank pay ₦4 for every text they receive.
There is also the deposit charge
In September 2019, the CBN directed Nigerian banks to charge a 2% processing fee for bank deposits above ₦300,000 for individual accounts and a 3% processing fee for deposits above ₦5,000, 000 for corporate accounts. The CBN argued that this was an effort to promote cashless transactions. However, the Central bank suspended these charges in December 2023.
A few months later, the CBN directed banks and other financial institutions to resume processing these charges from May 1st, 2024.
