Fintech firms outline ways to combat payment fraud for SMEs

Stakeholders in the Fintech space have emphasized the need to combat fraud and create friendly policies for SMEs to scale.

This was discussed at the Future of Payment and Fraud Conference 2023, organised by BusinessDay Media Limited.

Hakeem Akeyode, global head and marketing You-Verify, said there is a need for payment companies to have an extreme profile of their customers to know who they really are.

“We have focused more on collecting information than banks but information is not enough. These days, there should be a couple more verification,knowing customers’ footprints and digital verification. If we verify very well, we can be able to identify if the accounts are compromised or suspicious,” he said.

According to research by Smile Identity, a KYC provider, fraud attempts increased by 50 percent between the second half of 2020 and the first half of 2022. The first half of 2022 alone recorded a 30 percent increase compared to the same period in 2021.

Uchenna Nnodim, CEO of Raven Bank, also spoke of the roles Fintechs have to play, by putting some verification measures in place to identify fraudulent accounts.

“Fintechs need to do more in terms of security systems put in place while building their platform. OTP and BVN is not secured enough. One can steal your BVN and have access to your account. should update their insight around how fraudsters are behaving,” he said.

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Babatunde Obadero, CEO, Zitra Investments said collaboration and reporting is key to mitigating payment fraud.

“Education is critical. Customers need to know how to utilise their data. A lot of people are not enlightened. FinTech companies also need to collaborate in terms of dealing with security. Also reporting is not done enough,” Obadero said

For Enyioma Madubuike, chief legal officer, Kora, FinTech are big providers for small businesses by creating new markets.

According to Madubuike, “FinTech firms need to educate merchants and interact with regulators to identify opportunities in the market.”

Also, he said that a lot of work has to be done to develop a direct means of crossborder payment without changing currencies to dollar.

Meanwhile, the experts also discussed measures to make crossborder payment seamless and highlighted the challenges needed to be addressed.

Ideachi Amucheazi, chief fintech innovator officer Fast Credit said, “Cross-border payment services is a big issue for fintechs which revolves around policies by regulators, which makes it a bit difficult to address.”

Similarly, Nnodim added that some payment companies are adopting solutions to enable cross-border transactions, while stating the need to look at what the regulations allow.

Last year the persistent Foreign Exchange (FX) pressure occasioned by dollar supply shortage resulted in many Nigerian banks suspending or reviewing down their international transactions.

For Akeyode, compliance to regulations is super important no matter the innovation which has remained part of the problem.

The experts task payment companies to work on innovation to help SMEs drive down cost and ensure reliability.