Afghanistan's Atm Landscape: Exploring The Annual Transaction Volume

Afghanistan has a low number of ATMs per 100,000 adults, with 1.6 ATMs per 100,000 adults in 2018, according to the World Bank. This is far lower than the 2018 world average of 56.11 ATMs per 100,000 adults. Some sources suggest that there are thousands of ATMs in Afghanistan, while others state that there are only 39 operational units in the country. It is unclear how many annual ATM transactions take place in Afghanistan, but the country's low number of ATMs per 100,000 adults suggests that the annual number of ATM transactions may also be relatively low compared to other countries.

Afghanistan's ATM availability

Afghanistan has a low number of ATMs per 100,000 adults. In 2018, there were 1.6 ATMs per 100,000 adults, compared to a global average of 56.11.

Some ATMs and banks continue to function in Afghanistan, with restrictions on the levels of cash withdrawals. However, the banking sector is reported to be dysfunctional due to constraints on international transfers and concerns about liquidity and solvency.

Afghan United Bank has 39 ATM machines operational across the country, which can process transactions from a wide range of card brands, including MasterCard, VISA, Maestro, Cirrus, and American Express.

Bank-e-Millie Afghan also offers convenience ATMs across Afghanistan, with thousands of machines linked through the National Financial Switch (Afghanistan Payment System-APS). Cardholders can withdraw cash 24/7 from all Bank-e-Millie Afghan ATMs and from Azizi Bank, Ghazanfar Bank, and Pashtany Bank ATMs.

The Islamic Bank of Afghanistan issues INSTA cards, which allow customers to withdraw funds from their ATMs.

The rise of mobile money

Afghanistan has witnessed a rapid evolution in the mobile technology domain, with the number of mobile phones in the country surging from zero in 2000 to 18 million and growing. This has paved the way for the emergence of mobile money services, marking a significant step towards financial inclusion in a country where only 3% of Afghans have a formal bank account.

Mobile money services offer a range of benefits to Afghans, including the ability to store money digitally, make in-store purchases, transfer funds, pay utility bills, top up mobile phone credit, and pay school fees. It also facilitates the distribution of salaries, social service benefits, and cross-border customs duty payments. The convenience and accessibility of mobile money are particularly advantageous for women in Afghanistan, enabling them to conduct financial transactions from the safety and privacy of their homes.

However, the adoption of mobile money in Afghanistan faces several challenges. Consumers' behaviour in the country is influenced by a preference for cash transactions and the conversion of assets into precious metals. Additionally, rural Afghans often rely on barter systems, and cash is sometimes considered an inconvenience or irrelevant when basic needs are met through subsistence farming.

To address these challenges, organisations like USAID and its partners are working to increase the uptake of mobile money in Afghanistan. Their efforts include improving pricing models to include rural areas, enhancing interoperability between banks and mobile operators, exploring branchless banking laws, and addressing issues related to agent liquidity and sustainability.

While mobile money usage in Afghanistan is still evolving, the potential for growth is significant. With 70% of Afghan adults using mobile phones, there is a strong case for operators to offer mobile money services, especially in areas where accessing traditional bank branches is inconvenient or difficult.

Foreign currency restrictions

I was unable to find data on the number of annual ATM transactions that take place in Afghanistan. However, as of 2018, there were 1.6 ATMs per 100,000 adults in the country.

On November 2, 2021, the Taliban banned the use of foreign currency in Afghanistan. This meant that all payments had to be settled in the Afghan currency, the Afghani (AFN). The ban was announced in a statement:

> "The economic situation and national interests in the country require that all Afghans use Afghan currency in their every trade."

The ban on foreign currency was intended to prevent further economic collapse. The use of US dollars is widespread in Afghanistan's markets, and border areas use the currencies of neighbouring countries such as Pakistan for trade.

In February 2023, the Taliban imposed further restrictions on the use and export of certain currencies. These new directives limited the amount of US currency that citizens could export from Afghanistan in cash to $500 via land border crossings or $5,000 through airports. The export of gold or precious stones from the nation was also prohibited. Penalties for violating these regulations include prison sentences and fines.

Afghanistan's central bank remains without access to the country's foreign reserves, which are held in the US and Europe. This is due to human rights concerns and the lack of diplomatic recognition of the Taliban administration.

Bank card restrictions

Afghanistan has a limited number of ATMs, with an average of 0.61 ATMs per 100,000 adults between 2004 and 2018. As of 2024, Afghan United Bank has 39 units of ATM machines operational across the country.

Regarding bank card restrictions, there are several things to note:

• Some ATMs in Afghanistan will accept foreign-issued bank cards, but there are restrictions on the levels of cash withdrawals. It is recommended to check with local branches for specific limits.
• UnionPay cards are accepted at most ATMs for cash withdrawal in local currency and US dollars. However, daily cash withdrawal limits may apply, and there may be commission fees for using the service.
• Credit cards are not widely accepted for payment in Afghanistan, and there are frequent shortages of local currency. It is advised to check with suppliers before goods and services are received.
• Afghan banks are closed on Fridays, and queues at other times may be lengthy due to infrequent opening hours.
• US banks often deny transactions from Afghanistan unless the traveler provides advance notice of the transaction.
• To ensure the safety of your bank card, it is important to memorise your PIN and not disclose it to anyone. Additionally, be cautious of your surroundings when conducting transactions and regularly check your account for any unauthorised activity.

The future of Afghanistan's economy

Afghanistan's economy has been in a state of crisis since the Taliban takeover in August 2021. The country has experienced a sharp contraction, with a 20.7% GDP decline in 2021 and a further 6.2% contraction in 2022. The loss of international aid, which constituted 75% of total government spending, has been a significant factor in the economic downturn. The Taliban's policies and practices, including restrictions on women and girls, have also contributed to the economic decline.

Mobile money technology has been successfully adopted in Afghanistan, with 18 million mobile phone users in the country. This technology enables digital storage of money, fund transfers, and utility bill payments. However, consumer behaviour remains a challenge, as many Afghans prefer to keep cash at home or convert it into precious metals.

The Taliban's economic management has had mixed results. While they have successfully reduced corruption in customs and improved revenue collection at border crossings, their lack of transparency in budget expenditures and restrictive policies on the use of foreign currencies have negatively impacted the economy. The ban on opium, if implemented, could further shock the economy and take away livelihoods from rural communities.

The international community, including the World Bank, has provided humanitarian support and off-budget aid for basic service delivery. However, the lack of a recognised central bank or a private bank with the necessary authorities and access to assets hinders the effectiveness of these efforts. Restoring the credentials of the Afghan Central Bank and addressing sanctions concerns are crucial steps to address the economic crisis.

Overall, Afghanistan's economy faces significant challenges, and the future remains uncertain. Addressing structural deficiencies, promoting private sector growth, and ensuring sustainable international support are essential for the country's long-term economic development.

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