E-Fraud: Concerns heighten as online transactions hit N35trn

When the Central Bank of Nigeria (CBN) introduced cashless policy in 2012, its adoption initially experienced a slow take-off, but now, it posts upward changes on monthly basis.

 

The introduction of the policy led to creation of several payment channels and innovations for both banked and unbanked individuals to run daily business activities quickly, conveniently and as well, safely from various concomitant risks of carrying cash around, especially in large amount.

 

Ironically, the expected safety and security guaranteed on transactions made through such cashless platforms as Automated Teller Machine (ATM), NIBSS Instance Payment (NIP), National Electronic Fund Transfer (NEFT) and Point of Sales, are being threatened by fraudster and third parties, who are keen to divert money from legitimate owners, even as the money passes in non-physical form through electronic channels.

 

Transactions on these platforms have continued to rise. According to the Nigerian Inter-Bank Settlement Scheme (NIBSS), the value of total transaction made on the two major electronic payment platforms of NIBSS Instant Payment (NIP) and National Electronic Fund Transfer (NEFT) stood at N35 trillion in the last three quarters of this year, an equivalent of transaction value on all various electronic payment platforms in 2015.

 

The latest e-payment industry data obtained from NIBSS also has it that, in the last quarter of this year ending in September alone, the industry recorded N13.246 trillion transactions. It also distributed that while NEFT was N3.657 trillion, NIP recorded N9.589 trillion transactions.

Within the first two quarters this year, over 60 million units of transactions valued at N21.837 trillion were made on the two platforms.

Combined with transaction value and volume on other platforms, which according to NIBSS, includes E-bills, mobile money and cheque transactions, it is obvious that the amount of money that daily exchanges hands electronically among individuals, Small and Medium Enterprises (SMEs), multi-national companies and Ministries, Department and Agencies (MDAs) is on the high side, hence, the rising trend of electronic fraud (e-fraud). 

In 2013, NIBSS revealed that 822 cases of electronic fraud were recorded with an attempted value of N19.15 billion, while the actual loss to the online scam stood at N485.19 million.

Reported cases of fraud moved up by 78 per cent in 2014 to 1,461.  While attempted value reduced to N7.75 billion, the actual loss was N6.216 billion, indicating sheer failure in curbing fraudsters in almost every attempt they made in the year.

The trend, however, subsided in 2015, after efforts by the government and stakeholders, which is still adjudged by analysts in the financial sector as insufficient. For 2015, about 946 attempted e-fraud cases were recorded on the networks of banks, Other Financial Institutions (OFIs) and Mobile Payment Operators (MPOs), resulting in an approximated  loss of N5 billion, compared with N6.216 billion record of 2014.

Similarly, statistics released by the National Information Technology Development Agency (NITDA) last year posited that Nigeria lost about $450 million to computer and Internet- related frauds yearly while Minister of Communication, Mr. Adebayo Shittu, has also said  that N78 billion is lost yearly in Nigeria to all forms of cybercriminal activities.