Stakeholders in the Information Technology (IT) sector and financial institutions continue to lax security agencies and a liberal judicial system in the country for the frequent mobile electronic payment fraud in Nigeria.
They say that both the judicial system and security agencies in the country have shown utmost laxity in implementing and prosecuting fraudsters who have successfully divulged and compromised information systems of individuals and organisations.
Nigeria’s burgeoning electronic payment industry which has been gaining grounds of success and popularity in recent years 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) show that the volume of e-payment transactions grew to N32.5 trillion in the first quarter of 2018 (Q1 2018), a 10 percent rise from the recorded N29.4 trillion in the fourth quarter of 2017 (Q4 2017). This is a significant leap in numbers compare to the N18.2 trillion value of e-payment transactions recorded in 2016.
NIBSS Instant Payment (NIP) accounted for the largest share of e-payment transactions, followed closely by NEFT and automated teller machine (ATM) transactions have continued to rise, recording 212.4 million transactions in Q1 2018.
Details of the NBS report further showed that volume and value of Point of Sales (PoS) transactions have grown to reach 54 million transactions equating to N474.7 billion in 2018, up from the 48 million transactions which equaled N435 billion in Q4 of 2017.
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 and so it is very important for there to be awareness, implementation and enforcement of laws and prosecution of fraudsters in order to significantly reduce electronic fraud cases in Nigeria.
David Isiavwe, Chairman, Information Security Society of Nigeria says, “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 a while ago at an e-payment conference in Lagos, 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, ok 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 for 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 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 educating everybody on the implications of e-fraud,” he said.
However, aanalysts’ forsee massive reduction of e-fraud success rate in Nigeria with education and compliance amongst commercial banks, the regulators and customers.
