What started as an April Fool’s Day marketing campaign—or so we thought—from Sterling Bank, a tier-2 Nigerian commercial bank, turned out to be serious business.
On April 1, the bank posted on the social media platform X, “We’re doing our part by cancelling transfer fees. Let the other banks copy.”
Since that post, Sterling Bank has been running a well-oiled marketing campaign, winning the hearts of many Nigerians who once enjoyed no-transfer-charge offers from rebel digital banks like Kuda—the self-proclaimed ‘bank of the free’ that was no longer free. Who Kuda thought?
But the reality is, banks make billions of naira in revenue from interbank transfers, so cancelling transfer fees—no matter how small—means giving up a tidy non-interest income stream. Even digital banks that once offered free transfers have since walked it back. Interbank transactions go through a switching platform like the Nigerian Inter-Bank Settlement System (NIBSS), which charges a processing fee of ₦3.75 ($0.0024). When fintechs or banks waive that charge, it means they’re absorbing some of the cost.
But big Nigerian commercial banks have mastered how to eke out dizzying figures in revenue. Can’t they afford it? Technically, they can.
But unless they’ve found a way to cushion the cost elsewhere (they could charge more on maintenance costs, for example), it’s not a move most banks can sustain. Unlike traditional banks with diversified income streams, digital banks leaned heavily on free transfers as a growth strategy. When user volume exploded, the costs became unsustainable.
OPay, however, has somehow defied the odds, keeping its transfer charges lower than most. Industry insiders point to its high transaction volume and agent network, which help offset backend costs.
Sterling’s campaign may win points for customer sentiment, but without clarity on how it’ll replace that income, other banks are unlikely to follow. Banking is expensive business; and it’s hard to give up easy money while still raising staff salaries. For other banks to join Sterling Bank’s no-transfer-charge bandwagon, it may take a mandate from the Central Bank of Nigeria (CBN); without it, most banks won’t budge.
