Nigerian financial institutions, banks and information technology (IT) stakeholders have pushed the blame for increased records of mobile e-payment fraud to security agencies and the judicial systems which they say have shown utmost laxity in implementing and prosecuting fraudsters who have successfully divulged and compromised information systems of organisations.
Nigeria’s burgeoning electronic payment industry which is steadily gaining grounds of success and popularity due to the growth of broadband and internet penetration levels and increased smartphone ownership has opened a window for risk of more e-payment fraud as Nigerian consumers’ preferences continue to shift toward e-payment options for daily transaction activities.
The latest figures from the National Bureau of Statistics (NBS) shows that the volume of e-payment transactions grew to 238.8 million worth N18.2 trillion in the third quarter from 202 million in Q2 2016.
NIBSS Instant Payment (NIP) accounted for the largest share of e-payment transactions in the quarter with 52.82 percent, which was followed closely by NEFT at 30.07 percent. Details of the report further showed that volume of ATM transactions in Nigeria rose to 157.1 million in Q3 2016 from 136.3 million in Q2 2016 while value rose to N1.2 trillion in Q3 from N1.1 trillion in Q2 2016.
The volume of POS transactions in Nigeria rose to 16.0 million in Q3 2016 from 13.5 million in Q2 while value rose to N0.18 trillion in Q3 from N0.16 trillion in Q2. Mobile payments also rose to 10.8 million in Q3 2016 from 8.6 million in Q2 while value rose to N0.22 trillion in Q3 from N0.16 in Q2 while volume of internet transactions rose to 3.5 million in the third quarter of 2016 from 2.6 million in the second quarter of the year and the value also rose to N0.30 trillion in Q3 from N0.26 trillion.
Experts say that E-fraudsters who are most times, a few steps ahead of the systems are more than likely to ride on the back of increased e-payment participation which automatically translates to more money in those channels. Therefore, it is very important for the implementation and enforcement of laws and prosecution of fraudsters in order to significantly reduce electronic fraud cases in Nigeria.
According to David Isiavwe, chairman, Information Security Society of Nigeria, “Mobile fraud rate in Nigeria is increasing because there is low risk of detection and prosecution by security agencies and high return rate, so enforcement of laws is very important to reduce e-fraud in Nigeria because the thieves will always go where the money is which is currently in e-payment.”
Speaking at the annual payment systems and fraud conference held in Lagos recently, Regha Onajite, CEO of Electronic Payment Providers Association of Nigeria (e-PPAN) said: “ For the past seven years we have been talking about security forces like the police and judges not understanding us and not understanding that e-fraud is a very serious criminal offence.
“When we finally get the police to arrest these criminals and we go to court, the court does not understand how serious the offence is. For example, the Judge will say, okay, bring the server that was broken into so that we can confirm that the server was compromised. But how can we bring the server? So, of course the case will be dismissed,” Onajite said.
Suggesting how this can be resolved, the e-PPAN CEO told BusinessDay that judges and security agents need to be educated on the implication of e-fraud.
“We have been advocating judges training for a long time now, and last month with the support of Nigerian Electronic Fraud Forum (NEFF) and Central Bank of Nigeria (CBN), we had a training session for judges and that was when they were able to know what electronic payment fraud actually is. Before then, they did not know and that is because industry stakeholders do not want to train these agencies that need the education to be able to stop these criminal acts done online,” she said.
Chidi Umeano, head, Shared Services department, CBN, said the bankers committee has set up a subcommittee headed by Emeka Emuwa, managing director of Union Bank Nigeria for e-fraud enlightenment.
“I don’t know how far they have gone but I know they are working and they are educating everybody on the implications of e-fraud,” he said.
However, analysts foresee massive reduction of e-fraud success rate in Nigeria with education and compliance amongst commercial banks, the regulators and customers.
Jumoke Akiyode
