Fraud in the payment industry is rampant and on the increase. This is not unique to Nigeria alone, but a global trend that calls for a more collaborative and intensive effort of all stakeholders in the industry, both locally and internationally. On the 6th of November 2018, at the Civic Centre, Victoria Island Lagos, stakeholders convened for the 9th Annual Payment Systems and Fraud Conference. This meeting was organised by the E-Payment Provider’s Association of Nigeria (E-PPAN) in collaboration with the Central Bank of Nigeria (CBN) to deliberate on Fraud trends in the payment industry and how to effectively tackle this menace.
A shared concern for everyone present at the conference is a startling report from a research by Michael McGuire, a senior lecturer in criminology at Surrey University, which revealed that $1.5 trillion is lost every year to cybercriminals globally. Nigerian Interbank Settlement System — NIBBS’s 20I8 second-quarter report also showed that 21% of people succeeded in their attempt at payment fraud. The effect is that the industry lost over 490 million Naira in this quarter alone. This is a big threat to the growth and advancement of the industry, and Central Bank’s agenda to achieve 80% financial inclusion by 2020.
Cybercriminals are a major challenge for fintech payment solutions. While Fintech ensures that more and more people are available in the digital space to easily access financial services, hackers are developing better strategies to breach security protocols and gain access to information privacy and ultimately steal money. The result of this is a gradual loss of confidence in fintech products and in the industry as a whole.
Another challenge of fintech is fraud at agent points. The agent network of fintech providers is no doubt important to ensure financial inclusion for the unbanked population. However, they have become easy preys to fraudsters who capitalize on agent’s ignorance or lack of training on security measures to prevent fraud.
These were some of the resounding points that were laid out at the conference as winning strategies to reduce fraud in the payment industry.
Awareness and Training
Customers awareness and education should be given priority. People should know the importance of protecting sensitive information. Simple information like never disclose your ATM or e-wallet pin should be communicated regularly to customers. Security agencies need more training and increased capacity to stay ahead of fraudsters. The appropriate channels for reporting fraud should be made known to everyone.
A training program for both ethical and non-ethical hackers should be implemented by security agencies. Whereby, the non-ethical hackers will not only receive a reorientation but will in-turn help security agencies with the same skill and expertise they have used negatively in the past to prevent cybercrimes.
After all, is said and done, a huge responsibility rests on the operations team to pay attention to details and be more vigilant to detect the incidence of fraud early enough. With proper training and capacity in place, they should be quick to escalate it to the appropriate channels for immediate action.