Agent banking is the delivery of basic financial services by a third party, usually a shop, on behalf of a licensed institution.
The agent takes deposits, pays out withdrawals, opens accounts and accepts payments, using a terminal or phone connected to the institution. It turns digital money into cash and back, which is why it is called cash-in, cash-out. It costs a fraction of a branch to run, and in most emerging markets it is the main way people reach a financial service at all.
This explainer is written for the people who build or buy agent networks: banks and microfinance institutions, mobile money operators, and the analysts who evaluate them. It covers the mechanics, the scale by country, the economics for the agent and the provider, the regulatory direction, and the platform questions that decide whether a network works when conditions are worst.
How an agent transaction actually works
An agent runs two balances at once: physical cash in the till, and electronic value, often called float, in an account or wallet held with the provider. Every transaction moves value from one to the other.
- Cash-in
The customer hands over cash. The agent sends the same amount of electronic value from the agent account to the customer's account. The agent's cash goes up and its float goes down.
- Cash-out
The customer's account is debited and the agent's float is credited. The agent hands over cash. The agent's cash goes down and its float goes up.
- Rebalancing
Because customers do not arrive in balanced pairs, an agent that mostly takes deposits runs out of float, and one that mostly pays out runs out of cash. The agent rebalances at a bank branch, through a super-agent, or with another agent.
- Commission
The provider pays the agent per transaction. In some markets, Nigeria among them, the agent also charges the customer a fee directly.
- Settlement
Inside one provider, value moves by book transfer. Transfers to other banks settle through national switches, which is why switch availability matters so much to agents.
The vocabulary varies by country. Nigeria and Kenya say agent banking, India uses business correspondents, Brazil has correspondentes bancários in lottery shops and supermarkets, and Indonesia's bank agents run under the Laku Pandai programme. The model underneath is the same.
Agent networks by country
Definitions differ between countries and regulators, so the counts are not directly comparable. Nigeria has no official agent census; the agent estimate comes from industry reporting.
Globally, the GSMA counted 28 million registered agents in 2024, of whom 10 million were active in a given month, or about 755 registered agents for every 100,000 adults in mobile money markets, double the 2021 density. By 2025 registered agents had reached 30 million. The gap between registered and active agents, roughly two in three idle in any month in 2024, is one of the most important numbers in the business.
What agent banking costs, and who earns what
The case for agents has always been cost. A Gates Foundation-funded analysis from 2010 estimated that at full capacity a branch cashier carried more than 78 cents of fixed cost per transaction, against 11 cents for a point-of-sale agent and 4 cents or less for a mobile agent, and that setting up an agent cost 2% to 4% of a branch cashier. Studies from Latin America in the same period put agent transactions at about half the cost of branches and ATMs. These are historical benchmarks, but the order of magnitude has not been seriously disputed since.
For the provider, agent commission is the single largest cost line. The GSMA reported that commissions fell from 45% to 41% of mobile money provider income between 2023 and 2024, as providers grew other revenue.
For the agent, the economics are thinner than the headline volumes suggest. In Kenya, the average M-PESA agent earned about KSh112,244 in commission in the year to March 2026, down from KSh144,355 two years earlier, because the number of agents grew faster than the commission pool. In Lagos, TechCabal reported customers paying ₦100 to ₦150 to withdraw ₦5,000, with agents running 20 to 70 transactions a day and spending heavily on data and on travel to source cash.
An agent network is a liquidity business disguised as a technology business. The agent who cannot pay out cash, or whose terminal cannot reach the switch, has no product.
Where networks break
Three failure modes recur in every market. Liquidity: agents run out of cash or float, customers are turned away, and a rebalancing trip can cost more than the commission it protects. Fraud: the GSMA notes that most mobile money fraud involves agents or customers, and Nigerian reporting describes fake transfer alerts, false reversal claims and cloned terminals. Downtime: an agent terminal is only as available as the power, the mobile signal and the switch behind it.
Nigeria's 2025 and 2026 rules, and why they matter elsewhere
Nigeria has the most active agent banking rulebook in the world right now, and the direction it sets is likely to be followed elsewhere.
- Cash-out limits (December 2024)
₦1.2 million in total cash-out per agent per day, ₦100,000 per customer per day at one terminal, and ₦500,000 per customer per week across all channels.
- Geo-tagging (August 2025, relaxed May 2026)
Every POS terminal must be geo-tagged and may only transact near its registered address. The radius was set at 10 metres, widened to 70 metres in May 2026, with enforcement from 1 August 2026.
- New agent banking guidelines (October 2025)
Agents must operate from a fixed structure of at least a kiosk, must pass eligibility checks including a BVN watch-list check, and must transact only through designated principal accounts. Salary payments and cash loan disbursement at agents are prohibited.
- Exclusivity (from 1 April 2026)
An agent may serve only one principal and belong to only one super-agent at a time. The stated aim is to stop multi-principal agents exploiting gaps between systems.
- Dual connectivity (December 2025)
Processors must keep live links to both national switches, NIBSS and UPSL, with automatic failover, after single-switch outages caused frequent POS downtime.
Read together, these rules say that regulators now treat agent networks as critical infrastructure. They want every device located, every agent identified, every flow traceable, and the system kept running when a link fails.
The network is the weak point
Agent banking exists to reach people that branches do not, and those are also the people with the weakest infrastructure. The GSMA puts Sub-Saharan Africa's mobile broadband coverage gap at 10% of the population, the highest of any region, and rural adults there were 48% less likely than urban adults to use mobile internet in 2024. Across Africa, around 122 million people live outside broadband coverage and nearly 600 million lack electricity. No public source measures how many agents work in poor-coverage areas, but Nigeria's dual-connectivity order is direct evidence that downtime is an operating problem, not a theoretical one.
What to demand from an agent banking platform
Each requirement below maps to a rule or failure mode described above.
- Transactions that survive a lost connection
Ask what an agent can do when the device cannot reach the core or the switch, how much risk can be authorised in that state, and how the agent is protected from a transaction that later fails. Our guide to evaluating offline-first platforms sets out the four levels of offline capability.
- A limits engine the regulator can audit
Per-agent, per-customer, per-terminal and cross-channel limits, configurable as rules change, with the evidence trail to prove they were applied.
- Device identity and location
Every terminal tied to an agent, a principal and a location, with geo-fencing that reflects the current regulatory radius.
- Agent onboarding and exclusivity
Identity, watch-list and eligibility checks on the agent itself, and enforcement of one principal per agent where required.
- Float visibility and liquidity tools
Real-time float and cash positions, alerts before an agent runs dry, and support for agent credit lines so a busy agent is not turned away by a temporary shortfall.
- Fraud monitoring built for agents
Detection of fake alerts, reversal abuse, cloned devices and unusual agent behaviour, not only customer fraud.
- The real device floor
What the platform needs from the terminal or phone, how much data it uses in a month, and how it behaves on the cheapest device in the network.
MobiBank's position
MobiBank is a Finnish financial technology company building a mobile banking platform for markets where connectivity and infrastructure cannot be assumed, including a patented channel that allows the service to work without internet access. Agents and merchants are where that matters most, because they are where cash meets the system.
Certain capabilities described across this site remain under development, and the mechanism behind our offline channel is protected and not disclosed publicly.
Frequently asked questions
What is agent banking?
Agent banking is the delivery of basic financial services by a third party, such as a shop, pharmacy or kiosk, on behalf of a licensed bank, microfinance bank or mobile money provider. Agents typically take deposits, pay out withdrawals, open accounts and accept bill payments using a terminal or phone connected to the provider. The provider remains legally responsible for the service and pays the agent a commission per transaction.
How does agent banking work?
The agent holds two balances: cash in the till and electronic value, or float, in an account with the provider. When a customer deposits cash, the agent transfers electronic value to the customer's account; when a customer withdraws, the customer's account is debited, the agent's float is credited and the agent pays out cash. Agents rebalance cash and float at a bank, through a super-agent or with other agents, and earn a commission on each transaction.
What is the difference between agent banking and mobile money?
Mobile money is the account or wallet, usually run by a telecom operator or fintech. Agent banking is the distribution channel that lets customers put cash into and take cash out of accounts, whether those are mobile money wallets or bank accounts. In most markets the same shop acts as an agent for both, which is why regulators such as Nigeria's central bank now set rules on which principals an agent may serve.
How many banking agents are there?
The GSMA counted 30 million registered mobile money agents worldwide in 2025, up 16%, and 10 million active agents in 2024. By country, India has about 1.79 million business correspondents, Indonesia about 1.52 million Laku Pandai agents, Pakistan 731,814 branchless banking agents, Kenya around 572,000 active mobile money agents, and Nigeria an estimated 1.5 to 2 million POS agents operating 5.9 million active terminals. Definitions differ, so these figures are not directly comparable.
Is agent banking cheaper than branch banking?
Yes, substantially. A 2010 analysis estimated branch cashier fixed costs at more than 78 cents per transaction at full capacity, against 11 cents for a point-of-sale agent and 4 cents or less for a mobile agent, with an agent costing 2% to 4% of a branch cashier to set up. Studies in Latin America put agent transaction costs at about half of branches and ATMs. These benchmarks are dated, but the gap remains the economic basis of every agent network.
What are the CBN rules for POS agents in Nigeria?
The main rules are a ₦1.2 million daily cash-out limit per agent and ₦100,000 per customer per day per terminal (December 2024); geo-tagging of every terminal, with transactions allowed within 70 metres of the registered address from 1 August 2026; new agent banking guidelines from October 2025 covering eligibility, fixed premises and designated accounts; exclusivity to one principal from 1 April 2026; and dual connectivity to both national switches from December 2025.
What should a bank look for in an agent banking platform?
Seven things: what agents can do when the connection is lost and how that risk is controlled; a configurable limits engine with an audit trail; device identity and geo-location; agent onboarding, eligibility checks and exclusivity enforcement; real-time float and liquidity tools; fraud monitoring designed for agent-side schemes; and a realistic minimum device specification and data cost. Ask for a reference deployment in a market with comparable connectivity.
How much do banking agents earn?
It varies widely by market and location. In Kenya, the average M-PESA agent earned about KSh112,244 in commission in the year to March 2026, down from KSh144,355 two years earlier as agent numbers grew. In Lagos, agents reported charging customers ₦100 to ₦150 to withdraw ₦5,000 and handling 20 to 70 transactions a day, before data, transport and liquidity costs.
Related
Figures are the latest publicly available as of 9 October 2026 and are attributed to their sources in the text; country definitions of agents differ and are not directly comparable. This article is general information about agent banking and is not financial, legal or procurement advice. Certain capabilities described remain under development.