Internet fraudsters fleece Nigerians of millions of naira every day.

The dead resurrected and spoke in Kenya’s financial sector theatre. When Alfred Basweti’s signature appeared on Kenya Union of Savings & Credit Co-operatives (KUSCCO)’s 2022 financial statements, it was not merely an administrative oversight. It was the perfect metaphor for a financial system haunted by phantom profits and ghostly accountability. There was one problem, though: Basweti died before the document went public.

A November 2024 PwC forensic audit exposed how the executives inflated assets by Sh14 billion: They paid fictitious dividends from member savings. They funnelled Sh1.6 billion in untraceable commission. This macabre detail emerges from the heart of Kenya’s most devastating financial scandal. It threatens the stability of a financial sub-sector that forms the backbone of middle-class aspirations in Kenya.

On the other hand

Nigerian banking fraud has trippled. A report released by Nigeria Inter-Bank Settlement System (NIBSS) revealed that funds lost to fraud in Nigeria’s banking system have nearly trippled over the past five years. Analysis by the NIBSS estimated that 52.3 billion naira ($34.8 million) was lost to fraud in 2024.

On the one hand

In 2020, 11.6 billion naira went missing. This happened in Nigeria with a thriving technology and finance sector, the finance sector that is confronting a rival industry: Yahooze. That is another name for the industry populated by the internet-savvy Yahoo boys. Do you remember Yahooze? It was a successful song released by Afrobeats star Olu Maintain in 2007. The song celebrated the internet fraudsters.

Internet fraud is now an industry. It is thriving. It is jostling for attention with the finance sector. The fraudulent acts listed above came via the internet. Many Nigerians have lost billions of naira to these rats. What have we done to arrest the situation? We turned the act into a song and a dance. Yahooze.

In the long term

According to the report, fraudsters attempted to steal 86.4 billion naira in 2024. The numbers came after the latest GDP figures showed fourth-quarter growth of 3.8 per cent. This increase got a boost through the services sector: Finance and insurance. “The amount lost to fraud has increased over the past five years along with the growth of financial transactions in the digital payments sector,” the report stated.

Nigeria’s digital payment system is one of the most robust in Africa. We have a thriving technology startup ecosystem that raised an estimated 400 million dollars in 2024. According to media reports, such services are important as a cash shortage and currency reforms pushed users away from physical banknotes.

Because of the learned e-payment habit by Nigerians, fraudsters are using various methods to defraud unsuspecting Nigerians. Gift cards. Accounts opening. They are using stolen identities of senior citizens, minors, and foreigners to perpetrate the act. Due to this, an estimated 400 million naira was received in accounts opened with the stolen identities. Aside from this, many Nigerians were complicit in the act. Some were ‘’employed’ to find victims online through phishing. They targeted mostly Americans. Canadians. Mexicans. Etc.

Why do these matter?

The law recovered the stolen funds and arrested some bank employees. However, the international fraud monitors have categorised Nigeria under the “grey list.’’ Do you know the co-travellers? South Sudan. Bulgaria. Monaco. Croatia. These countries were deficient in preventing money laundering and terrorism financing. Meanwhile, the Economic and Financial Crimes Commission had arrested several foreigners in connection with the internet fraud.

In the short term

While we danced to Yahooze, the fraudsters are fleecing Nigerians of millions of naira. Every day.

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Cyber criminals exploit weak systems, lax regulations, and limited consumer awareness

A crisis does not erupt suddenly. It does not explode like a volcano. It brews s.l.o.w.l.y. It is like a leaky oil pipe before the explosion. It is like the cracks on a wall before the eventual fall. If an experienced mason does not intervene and checkmate the cracks, the fall of the wall will be worse than the story of Humpty Dumpty.

On the one hand

Nigeria’s fintech payment boom—one of Africa’s digital powerhouses—is facing rising cybersecurity threats. The support of banks, fintechs, payment service providers [PSPs], mobile money operators, payment service banks [PSBs], high penetration of mobile phones, and user-friendly apps have turned electronic payment into a movement. This movement drives everyday living. The Nigeria Inter Bank Settlement System [NIBSS] annual fraud report showed that in 2023 alone, attempted fraud rose by 45 per cent.

On the other hand

The mobile and online platforms were the most exploited modes. Bank customers lost billions of naira. Many customers did not report the matter. Research showed that cyber-criminals are exploiting weak systems, lax regulations, and limited consumer awareness to perpetrate sophisticated fraud schemes. If you have been a victim of cybersecurity fraud, you would understand.

In the long term

We lack enough cybersecurity awareness. The reason many bank customers still click on a phishing link. Reply to emails requesting their login credentials. Answer spurious phone calls from ‘your bank’ manager. Open fake fintech apps. From the NIBSS report, mobile and online channels are the weakest links. Bank customers have lost billions of naira. These fraudulent cases went unreported because fraud-reporting systems are fragmented. Customers do not get quick resolutions. Therefore, one four-letter word that has stopped victims from pursuing fraudulent financial matters is T.I.M.E.

For instance, you have cancelled an online subscription. The merchant did not stop the monthly deduction. Your bank promised to investigate the case in eight working days. Two weeks, approximately. The other day, you visited the office of the special anti-fraud unit of the Nigerian Police. The investigating officer demanded a petition.

Then he needed payment to issue a warrant of arrest. He needed the warrant to apprehend the suspect. He needed time to investigate the case. Time stood still. The time spent pursuing a case is enough to build a fintech unicorn! This is why cases are unreported. The victims simply moved on. Licked their wounds. The victims may be sceptical about returning to e-payment.

In the short term

If the brewing crisis is not nipped in the bud, and e-payment fraud persists, the gains of the cashless policy may evaporate. The interest of bank customers may wane. Financial inclusion may become a financial delusion.

*Olaegbe (psalmsonolaegbe@gmail.com) 

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According to the apex bank, the innovative digital gateway allows Nigerians in the diaspora to obtain a BVN remotely without the need for a physical presence in Nigeria.

The CBN Governor, Mr Yemi Cardoso, described the initiative as a milestone in Nigeria’s financial inclusion journey and a critical bridge connecting the country to its global citizens.

“For too long, many Nigerians abroad have faced difficulties accessing financial services at home due to physical verification requirements.

“The NRBVN changes that. Through secure digital verification and robust Know Your Customer, KYC, processes, Nigerians worldwide should now be able to access financial services more easily and affordably,” he said.

Cardoso described the NRBVN as a dynamic platform.

“It is not the final destination, but it is the beginning of a broader journey.

“Stakeholders across the financial ecosystem, including banks, fintechs, and International Money Transfer Operators, IMTOs, are encouraged to integrate and collaborate in shaping and refining the system as it evolves,” he said.

He said that remittance flows through formal channels increased from 3.3 billion dollars in 2023 to 4.73 billion dollars in 2024, due to recent reforms and policy shifts, including the introduction of the willing buyer, willing seller FX regime.

According to him, with the NRBVN in place, the CBN is optimistic about reaching its one billion dollars monthly remittance target.

“We are building a secure, efficient, and inclusive financial ecosystem for Nigerians globally.

READ ALSO: Lagos govt set to launch monthly rent payment scheme —Official

“This platform is not just about financial access, it is about national inclusion, innovation, and shared prosperity,” he said.

Cardoso also reiterated the apex bank’s commitment to reducing the high cost of remittances in Sub-Saharan Africa and ensuring continued engagement with stakeholders to optimise the platform.

In his remarks, Muhammad Abdullahi, CBN’s Deputy Governor, Economic Policy Directorate, said that the NRBVN stood as a transformative tool, meticulously designed to enhance the banking experience for our diaspora community.

Abdullahi said that by providing secure, remote access to financial services, the platform simplifies the process of maintaining robust banking relationships, facilitating meaningful investments in Nigeria, and supporting the seamless flow of remittances.

“It is our firm belief that this initiative will not only strengthen economic ties, it will also foster a sense of pride and belonging among Nigerians worldwide, encouraging them to play an even greater role in our nation’s development,” he said.

The inauguration also featured a presentation by the Managing Director of NIBSS, Mr Premier Oiwoh, and a panel discussion with key industry stakeholders.

The NRBVN is part of a broader framework that includes the Non-Resident Ordinary Account, NROA, and Non-Resident Nigerian Investment Account, NRNIA.

Together, they enable access to savings, mortgages, insurance, pensions, and investment opportunities in Nigeria’s capital markets.

Under current regulations, Nigerians in the diaspora will retain the flexibility to repatriate the proceeds of their investments.

Importantly, the NRBVN system has been built with global standards in mind, incorporating stringent Anti-Money Laundering, AML, and KYC compliance protocols to ensure the integrity, transparency, and security of Nigeria’s financial system.

Every NRBVN enrollment undergoes comprehensive verification checks to safeguard against illicit financial activity, bolstering international confidence in the platform and the broader financial ecosystem.

Source: NAN

The post CBN unveils BVN platform for diaspora Nigerians, states benefits appeared first on Frontpageng.

*Internet fraud is competing for attention with the finance sector

The dead speak in Kenya’s financial sector. When Alfred Basweti’s signature appeared on Kenya Union of Savings & Credit Co-operatives (KUSCCO)’s 2022 financial statements, it was not merely an administrative oversight. It was the perfect metaphor for a financial system haunted by phantom profits and ghostly accountability. There was one problem though: Basweti died before the document was made public.

A November 2024 PwC forensic audit exposed how the executives inflated assets by Sh14 billion: They paid fictitious dividends from member savings. They funnelled Sh1.6 billion in untraceable commission. This macabre detail emerges from the heart of Kenya’s most devastating financial scandal. It threatens the stability of a financial subsector that forms the backbone of middle-class aspirations in Kenya.

On the other hand

Nigerian banking fraud has tripled. Report released by Nigeria Inter-Bank Settlement System, NIBSS, revealed that funds lost to fraud in Nigeria’s banking system have nearly tripled over the past five years.

On the one hand

Analysis by the NIBSS estimated that 52.3 billion naira ($34.8 million) was lost to fraud in 2024. In 2020, 11.6 billion naira was stolen. This happened in Nigeria with a thriving technology and finance sector, the finance sector that is confronting a rival industry: Yahooze. That is another name for the industry populated by the internet-savvy Yahoo boys. Do you remember Yahooze? It was a successful song released by Afrobeats star Olu Maintain in 2007. The songs celebrated the internet fraudsters.

The internet fraud has become an industry. It is thriving. It is competing for attention with the finance sector. The fraudulent acts listed above came via the internet. Many Nigerians have lost billions of naira to these rats. What have we done to arrest the situation? We turned the act into a song and a dance!

In the long term

According to the report, fraudsters attempted to steal 86.4 billion naira in 2024. The numbers came after the latest GDP figures showed fourth-quarter growth of 3.8 per cent. This increase got a boost through the services sector: Finance and insurance. “The amount lost to fraud has increased over the past five years along with the growth of financial transactions in the digital payments sector,” the report stated.

Nigeria’s digital payments system is one of the most robust in Africa. We have a thriving technology startups ecosystem that raised an estimated 400 million dollars in 2024. According to media reports, such services are important as a cash shortage and currency reforms pushed users away from physical banknotes.

Because of the learned e-payment habit by Nigerians, fraudsters are using various methods to defraud unsuspecting Nigerians. Gift cards. Accounts opening. They are using stolen identities of senior citizens, minors, and foreigners to perpetrate the act. Due to this, an estimated 400 million naira was received in accounts opened with the stolen identities. Aside from this, many Nigerians were complicit in the act. Some were ‘’employed’ to find victims online through phishing. They targeted mostly Americans. Canadians. Mexicans. Etc.

NIBSS said some funds were recovered. Some bank employees implicated. However, international fraud monitors have categorised Nigeria under the “grey list.’’ Co-travellers are: South Sudan. Bulgaria. Monaco. Croatia. These countries are on the list because they were deficient in preventing money laundering and terrorism financing. The Economic and Financial Crimes Commission (EFCC) has also arrested several foreigners in connection with the internet fraud.

In the short term

While we sing along and dance to Yahooze, the fraudsters are fleecing Nigerians of millions of naira. Every day.

*Olaegbe (psalmsonolaegbe@gmail.com)

The post Thriving tech, finance sector and Yahooze! appeared first on Frontpageng.

Is ISO 20022 the reason banks are investing in technology upgrades?

We paid N25,000 as transfer charges for N15,000 to mobilise one of our partners in Ghana in 2004. The payment was urgent. If it did not happen then, we would lose the business. He said to wire the money through Ecobank. Then, Ecobank was the only bank in Nigeria with a presence in Ghana. Our partner would merely walk into any Ecobank branch in Ghana on the streets of Accra and cash the fund from a teller.

It was as if I had stretched a hand in Nigeria and placed the cash in his hand in Ghana. Quite interesting. However, the sacrifice was huge. Well, Ecobank held us in a stranglehold. We had no choice. We played along. The bank won. Our partner was happy. That was in the past.

On the one hand

It is easy and cheap to make such a transfer now. Many banks offer the same service. Besides, technology has simplified banking. But this has also attracted the attention of criminals who are searching for ways to bypass the laws and perpetuate their illegal activities. While cross-border payment is easy in 2024, criminals are taking advantage of this to destroy economies through money laundering.

If there were no banks, how would the drug dealers and money traffickers launder their funds? Funds would be ferried across land borders. Concealed in holdall bags in the trunks of SUVs. And dry-cleaned in the open market.

On the other hand

The existence of banks has made the trade easy for criminals. The banks have become dry cleaners for illicit funds. They launder illegitimate funds, making the funds disappear into the system. As such, the introduction of ISO 20022 Payment Standard, a common, global end-to-end standard, has come to prevent the illicit business of money laundering activity. Oh, is ISO 20022 the reason banks are investing heavily in technology upgrades?

READ ALSO: Kidnapping: Police neutralise 10, arrest nine suspects

In the long term

The Committee on Payments and Market Infrastructures (CPMI) adopted the standard to improve cross-border payments. The global adoption of the standard will end in 2025. At its March 2024 meeting, the Swift Board re-confirmed the community’s commitment to ending the coexistence period in November 2025. It emphasised that priority would go to payment instruction messages to ensure operational continuity and interoperability.

Banks around the world are migrating to ISO 20022 standard. Because corporate bodies are demanding richer, structured data to enhance their payments and reconciliation processes. Besides, the G20 is promoting the harmonised use of the standard for enhancing cross-border payments.

For instance, NIBSS has deployed the ISO 20022 payment standard. NIBSS employed a foreign company, Payment Components, to implement the global standard. Payment Components has worked with over 65 banks and financial institutions in 25 countries.

The Central Bank of Kenya (CBK) has transferred the Kenya Electronic Payment and Settlement System (KEPSS) to the ISO 20022 platform. Last month, Kenya’s banking industry regulator directed lenders, including microfinance institutions to start testing the upgraded system for messaging high-value financial transactions aimed at increasing the speed of transfers while heightening the checks against money laundering.

Kenya’s Real-Time Gross Settlement (RTGS) system is operated by CBK to process large-value and time-critical payments. It is the backbone of Kenya’s domestic and regional payment transactions.

The initiator of the standard, Swift, was founded in the 1970s, based on the ambitious and innovative vision of creating a global financial messaging service, and a common language for international financial messaging.

Swift and the Board have urged its members to reinforce their efforts to switch cross-border payment instructions to ISO 20022 in the next 18 months. It said it would continue to provide resources to support the community in achieving this important milestone.

Nicolas Stuckens, Head of ISO 20022 Adoption, and Data Quality at Swift explained that the standard helps the banks to reduce friction, enhance straight-through processing (STP), and better reconciliation.

The ISO20022 Standard will enhance interoperability between domestic and international payment systems, facilitating easier cross-border transactions, and increasing the ease of doing business globally.

In the short term

As a bank customer, what was your experience during this technology upgrade?

*Olaegbe (psalmsonolaegbe@gmail.com)

The post Cross-border payments, money laundering, and dry cleaners appeared first on Frontpageng.

You need to detoxify. Detoxification is the medicinal removal of toxic substances from your body. The process eliminates harmful compounds accumulated over time due to environmental pollution, unhealthy diet, or substance abuse. Detoxification uses various methods. Diet. Herbal remedies. Intermittent fasting. Therapy. Research says the goal is to support your body’s natural detox systems: the liver, kidneys, and digestive tract to cleanse and purify your body.

On the one hand

A digital detox is detaching yourself away from social media platforms and electronic devices: mobile phones, laptops, or tablets. It is a digital reset. It forces you to be present. The idea is to break the cycle of dependency on digital devices. The overall effect can lead to improved mental health. Better sleep. Meaningful interactions with others. I observe digital detox every week.

On the other hand

A Fintech detox can be as short or as long as you want. Recently, I had a 72-hour Fintech detox. I was refreshed. You may not even think about it. But in the new dispensation, you may decide to go days or weeks without engaging Fintech in any form. It may be a major reset. It is up to you. For me, I took three days off and shunned engagements with Fintech. I took a break from Fintech. I did not use Fintech products at all, even to receive and send funds. Can you try it?

In the long term

The pandemic has changed the electronic payments landscape and hastened the adoption of instant payments as people switch to electronic channels for funds exchange. The Covid has transformed our lifestyle. Electronic payment is our world. The effect of the pandemic has pushed all of us to worship at the Fintech altar. We have moved in horde from cash to card, from bank branch to virtual payment and from virtual to instant payment.

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Then many Fintech start-ups emerged to oil the path of worship. A report from ACI Worldwide and Global Data, a leading data and Analytics Company, and the Centre for Economics and Business Research says the volume of real-time payment transactions in Nigeria’s economy will hit 8.9 billion in 2027 from 5.1 billion in 2022.

The next time you need more hours to work on a project, consider a digital detox. It will lead you to Fintech detox. No screen time equals Fintech detox. Fintech detox means working offline.

NIBSS Instant Payments (NIP) is Nigeria’s real-time payment system. NIBSS rolled out NIP in 2011. It is an account-number-based online, real-time inter-bank payment solution. The banks, micro-finance banks, and mobile money operators support NIP. You can use it via the Internet, mobile banking, bank branches, kiosks, mobile USSD, PoS terminals, and ATMs. This has helped NIP to achieve high adoption and usage rates.

With Fintech detox, you have eliminated phishing, identity theft, and fraud because you rely on cash and not a card. Your spending is minimised. You are not compelled to spend money because you have prepared for all your needs in advance. No mobile banking. No USSD. No online shopping.

You will not send money via electronic means. You will rely on cash for your purchases. You will not register to complete any transaction. You’d reduce screen time. In exchange, you will have productive time. For instance, if you spend an average of six hours online per day, that is about 180 hours per month. You can transfer this to improve your life.

By disconnecting from Fintech, and by extension digital, I did more. I concentrated more. I got more out of life. I finished personal projects on time. Maybe you can work at it too. In the process, you could pick up a new skill that could lead to a promotion. Or get a raise at work. Perhaps you can start a side hustle for some extra income.

When I discovered Fintech detox, I was on a digital detox. I had restricted access to my mobile phone and laptop. The devices were in my limo’s trunk at a retreat. Yes, because I had no access to my devices, I had no access to the Fintech menu. That was the ha-ha moment. The next time you need more hours to work on a project, consider a digital detox. It will lead you to Fintech detox. No screen time equals Fintech detox. Fintech detox means working offline.

In the short term

With Fintech, you need a device to pay bills, make transfers, and shop online. Start with a digital detox. Then graduate to Fintech detox.

*Olaegbe (psalmsonolaegbe@gmail.com)

The post Can you go on a Fintech detox? appeared first on Frontpageng.

Research shows that money laundering is a tough business. Sometimes it is harder than making money. The targets are being monitored by law enforcement agencies like the Police, EFCC, the FBI, and FinCEN. That is why criminals across the globe employ creative methods for transferring cash around.

Don’t go through the above route. It is illegal. It is stressful. It destroys the economy. And you will be caught. Repeat. You will be caught.

READ ALSO: Why cyber attackers have you on their radar, By Rarzack Olaegbe 

Transferring illegal cash usually follows many stages. Three will be discussed here.  The criminals can make placement, layering and integration. When illegal cash is generated, it is placed in the financial system. It is kept in circulation. After that, the money is layered within the financial system. What does this mean? The cash is broken up. It is broken down. It is moved around. Sufficiently. To obscure the audit trail. This phase helps to clean the dirty money. Effectively. Then the “clean” money goes back to its rightful owner. It is integrated. It is difficult. But the criminals do it regularly. It is done in a deft way to avoid financial regulations.

On the one hand

Don’t go through the above route. It is illegal. It is stressful. It destroys the economy. And you will be caught. Repeat. You will be caught. You will be penalised. So, walk the narrow path. Those who did have embraced the online channels. They are transferring money through NIP. Or Nigeria Inter-Bank Settlement Instant Payment platform. Between January and April 2022, the platform operator said more than N114.8 trillion have passed through the pipe.

The platform is easy. It is efficient. More customers have embraced the channel. It delivers the money when and whenever it is needed. Instantly. The NIBSS report shows a 44% increase in e-payments in Nigeria. In 2021, the figure was N79.5 trillion during the same period. Data from NIBSS shows that the NIP volume did rise to 1.4 billion in January through April.

The NIP is account-number-based. It is online. It is a real-time inter-bank payment software developed in the year 2011 by Nigerians. It is the Nigerian financial industry’s preferred funds transfer platform that guarantees instant value to the beneficiary. All the banks use the platform for its efficiency and effectiveness. It works through various channels. Internet banking. Bank branch. Kiosks. Mobile apps. Unstructured Supplementary Service Data, USSD, Point of sales. ATM. It works.

On the other hand

But within the software industry, Nigeria is not the leading country. It is China. China is in the top five emerging nations. It had market revenues of $66.8 billion in 2020. India had $18.5 billion. Brazil had $11.2 billion. Research shows that China will lead the software industry in the top five emerging nations with a value of $94.4 billion in 2025. India and Brazil will follow with expected values of $24.7 and $15.3 billion respectively. What was the software market size in Nigeria by value in 2020? NOTAP knows.

Research indicates that the top five emerging countries comprise the key emerging economies in the world. Brazil, China, India, Mexico and South Africa. These countries contributed $105.4 billion to the global software industry in 2020 with a compound annual growth rate (CAGR) of 1.1% between 2007 and 2011. The top five emerging countries are expected to reach a value of $147.0 billion in 2025 with a CAGR of 6.9% over the 2020-25 period.

Research indicates that the top five emerging countries comprise the key emerging economies in the world. Brazil, China, India, Mexico and South Africa.

In the short term

What are the top five software in Nigeria?

Is it payment? Banking. Loans. HR. Health. Logistics?

Do we have sector-specific software?

There is no one-size-fits-all software. Nigerian developers have “helped” the imported software to rewrite codes in order to “fit” into the local environment.

Why do we keep importing software?

It is multiplex.

There are Nigerian firms that service foreign firms and those in the diaspora.

Are they criminals?

*Olaegbe (psalmsonolaegbe@gmail.com)

The post How criminals transfer funds to evade arrest, By Rarzack Olaegbe appeared first on Frontpageng.

The engine of growth is a way to achieve responsible growth. This is reliant on customer use of your product or service. McKinsey’s 2022 report on the future of payments in Africa predicts a 20% annual domestic revenue growth compared to 7% in the global market.

Research shows Africa is a continent of opportunities and talents. This is evident in the participation of foreign investors in local businesses and multinationals setting up here. Africa has a growing diaspora community. Remittance inflows to sub-Saharan Africa have increased by 14.1% to $49 billion in 2021. This follows an 8.1% decline in 2020. Nigeria was the largest recipient in the region with an 11.2% increase.

On the one hand

The African Fintech space has recorded significant growth in the past five years. We have witnessed the growth of legacy players and new players across the value chain. Data from NIBSS shows more than N286.45trn (US$682 billion) passed through its engine in digital payments in 2021. This is a 71.9% growth in digital transactions (via NIP) when compared to the year 2020. Investors’ interest in the region has also surged. The Nigerian Fintech space has US$741.6 million in 2021 in foreign direct investment. This is a significant year-on-year increase compared to 2020.

In the report, The Nigerian Financial Services Market, the Industry, its Companies, and its People by Intelpoint, Deremi Atanda, the Managing Director of Remita Payment Services said the industry is growing. “Major factors that can empower the industry to continue its present trajectory include but are not limited to innovation. Fintech has pushed innovation in diverse areas.”

READ ALSO: The dark side of the cashless economy, By Rarzack Olaegbe

For instance, Fintech firms have pushed out many innovative products in the past decade including payments, crypto, DEFI, insurtech, mobile money, remittances/cross-border exchanges, digital savings/credit, investments etc.

Atanda explained that these innovations have enabled African countries to transition from “physical retail banking to online payments.” The innovations have simplified remittances. Made trans-border solutions possible. Deepen financial inclusion. “Innovation will continue to play a major part in redefining and repositioning the industry’s future.”

Tosin Eniolorunda, Founder/CEO of Moniepoint said payment is the basis for tech products to succeed. “If you have an Edutech product, for instance, and customers cannot pay for it. You don’t have a business.” He added that payment companies should lead the way since they are enabling transactions in the digital space. And recent regulations in Nigeria have highlighted the importance of digital payment solutions.

In Nigeria, digital payments have unlocked more opportunities for business, economic growth, and general advancement. Policies meant to foster these opportunities have also inevitably led to the growth of the payments space.

On the other hand

Besides, the Fintech firms mentioned in this story have payment engines that have pushed the payments frontier. They have made it easy for customers to make payments conveniently. For instance, Moniepoint started out building infrastructure for financial services providers. Part of its drive is to digitise the African economy. Remita is a household name in the ecosystem. Flutterwave is making waves with its latest launch.

“We have built backend infrastructure used by nearly every major bank in the country. We built some of the earliest digital banking platforms. We are empowering businesses to experience the full banking experience, with appropriate support to grow,” Eniolorunda explained.

However, Gbenga Agboola, Founder of Flutterwave pointed out that the key objective of B2B payments is to collect payments quickly, easily and at a low cost. The payments industry still has many opportunities to explore the digital payments sector in Nigeria.

“The tap-and-pay method – mainstream in the UK – can become a mainstay in Nigeria. Payment by e-Naira via QR codes can grow even more. Instore payment through Google Pay and Apple Pay can become even more popular in Nigeria,” Agboola said.

In addition, Laurin Hainy, CEO of Fairmoney explained that the credit-led neo-banking model and net banking are still in their infancy in Africa. Despite this, the potential for the future is great. “Leveraging heavily on technology has helped to increase the reach and adoption of neo-banks remarkably. In the next decade, it is almost predictable that a neo bank will be among Nigeria’s top five banks in terms of customer base and transaction volume,” Hainy said.

As one of the first in Africa to adopt the credit-led neo-banking model. Fairmoney is striving to exploit this banking model further to solve emerging markets’ finance-related problems.

In the short term

How are these Fintech driving payments?

Remittance inflows have increased to $49 billion. The funds did not fall from the sky like manna.

Did the payment engines make it happen?

Yes. There are still opportunities for more growth engines.

*Olaegbe (psalmsonolaegbe@gmail.com)

The post How Fintech drives payment through diverse growth engines appeared first on Frontpageng.

Waiting is good. But it is tiring. If you know what you are waiting for, and why you are waiting, with joy you will wait. A groom waits for his bride. A pupil waits for after-school chocolate. The president-elect waits for the baton. These waiters have the assurance of why they are waiting. They know what comes after the wait. But what do you do when your delay is uncertain, untimely, and unending? What do you do when it destroys the trust between two partners? There is no joy in waiting. Users of digital channels have endured the agony of waiting. That is the trend. That is the way it is.

On the one hand

In 2022, making payments digitally was the best thing after ChatGPT. Click the send button. Your transactions were delivered. Blink. The recipients called to acknowledge the payments. Digital payment had such a high level of efficiency. And consistency. This regularity had built trust between millions of partners and parties. The trust was mutual. Could it be eternal? The parties were sure the electronic transactions would deliver. Instantly. When digital payments moved at the speed of thought, businesses flourished. The delivery channels were super. Optimal.

A software engineer-friend said the banks’ servers need replacements. The software needs an upgrade. This should have happened 36 months ago.

The advent of the Nigerian Inter-Bank Settlement System (NIBSS) Instant Payment gateway (NIP) has raised the bar. The plethora of USSD codes from the banks’ Fintech department sent the ecosystem into a frenzy. Experts hailed these modern inventions as the best thing after electricity. We were quick to jump on the bank wagon. We had millions of reasons to use the codes. Do you want to top up your phone? Done. Do you need to recharge your cable television? Done. Is paying your salon subscription a bother? Not anymore! Nothing comes close to the codes. Do you want instant payment delivery? Send it through NIP. NIP does not fail. It cannot fail! We were in a cashless paradise. Or so we thought. Until the devil crept into the naira redesign policy.

READ ALSO: Why cyber attackers have you on their radar, By Rarzack Olaegbe 

On the other hand

In 2023, some banker-friends said the country was the first to develop instant payment, that even America does not have it, that Australia got it in 2022, and that we should be grateful to the e-payment gods! Well said. But the e-payment gods and priests are disappointingly embarrassing lately. The e-payment gods are on holiday. They are not likely to return soon. The shrine is empty. It is in darkness. There is no fire. There is no oil. There is no goat. The e-payment worshippers are agitated. They are waiting for the priests. No one knows when he would say yes. Is the wait worth it?

A software engineer-friend said the banks’ servers need replacements. The software needs an upgrade. This should have happened 36 months ago. The banks have not done so. This is the reason we are experiencing several failed transactions. The banks made provision for a year of “capital expenditure as opposed to a lifetime of built-in budgets with recurring maintenance.”

She shared a story. One of the FUGAZ banks was ready to switch on a particular service. The service would accommodate 40,000 transactions in one hour. “We felt we would not get up to 10, 000 transactions in a day. Then we switched on the feature. We had 400,000 transactions in one hour. Everything crashed. It took two weeks to recover. We had to start from the beginning.”

What has happened to our networks? What is the matter with our switches? Why are the ATMs not working? Are they available? Do we have to “manage it like that” (MILT)?

Are we not having a similar experience? What has happened to our networks? What is the matter with our switches? Why are the ATMs not working? Are they available? Do we have to “manage it like that” (MILT)?

“One financial institution is too small to build the infrastructure for scale. It is not economically feasible. Our financial institutions are too small to afford it. Even if they can, it will be prohibitive to build it during a crisis,” she said.

In the short term

I was in a fuel station. Two queues emerged. Line A and B. Line A was shorter. Line B was longer. Within minutes, the motorists on line B had disappeared.

Why?

They paid cash.

What happened to line A?

We were the victims of the cashless transaction! We were waiting for the network to be restored.

*Olaegbe (psalmsonolaegbe@gmail.com)

The post Is making payment digitally worth the wait? appeared first on Frontpageng.

He may be making a jest at the Nigerian government when he came up with the definition, but that has been the sad reality for many Nigerians in the last few days. Nigerians, being law-abiding citizens, took all the currency notes at their disposal to banks as the January 31st deadline set by the CBN when the old notes would cease to be legal tender in the country, hoping to get new notes and move on with their daily struggles. But to our consternation, Nigerians soon discovered that the newly printed mint notes were not available in most banks, causing a quagmire with the scarcity of new notes while market men and women were no longer accepting the old.

With the new naira notes as scarce commodity being pursued by many Nigerians, times have turned from worse to hellish for most with banks claiming non-availability of the new notes while the CBN is insisting that enough of the new notes have been sent to the banks. In other words, between the vault of the CBN and the commercial banks, the new naira notes have developed legs or wings and simply disappeared. Are we not in a funny country?

We are not at war and there is no reason why people will have money in their bank accounts but cannot access their funds.

A video went viral last week where a married woman stripped herself half-naked inside a banking hall out of frustration. Her grouse was that she had deposited all her old notes in the bank and the bank was not forthcoming with new notes. After several visits to the Bank without any tangible result, she stripped down to her undergarments, asking the bank to close her account and give her all her money; an action that attracted the attention of the Branch Manager of the Bank. Whether the stunt was able to cough out some funds for the desperate woman was not captured in the video as she was quickly led away to the bank Manager’s office.

She was not the only one frustrated by the incompetence of those at the helm of affairs in the country. What Nigerians have been subjected to in the last few days is enough to bring down a government in other saner climes.

There is tension everywhere. A police station was torched in Ibadan, Oyo State, last week as miscreants took to the streets in protest over the development. If care is not taken, we hope the anger will not spread to other parts of the country. President Muhammadu Buhari, on Friday, asked for seven more days to tackle the new naira scarcity. I doubt if hungry Nigerians have the luxury of time to grant their leader another seven days of hunger, want and agony.

READ ALSO: An open letter to Baba Buhari, By Kazeem Akintunde

A close friend was in her bank to withdraw some cash last week, only to be told that there was no cash. It was when she approached the Bank Manager alongside two other desperate customers that she got a reprieve. They were told to simply share six thousand naira that a customer came to deposit. She was lucky to get two thousand naira out of what the manager said was what he could provide. Yet, my friend has over a million naira in her account.

A first-generation bank close to my house starts receiving customers now from as early as 6 a.m. By the time it is 8 a.m. when the bank is expected to open for business, there will be over 500 customers by the gate. All four ATM machines at the bank have not been working, and there is a standing instruction from the CBN that payment across the counter is prohibited. Again, fund transfer has become a herculean task as customers are told that there is no network. After several shows and reports of anger and frustration clearly shown by the disposition of customers, the CBN relaxed its rule and allowed banks to give N20, 000 only across the counter per customer. Even at that, many of those banks have the cash to give out. How can the CBN mop up over N1.7 trillion from the system and print only N300 billion new notes? How?

Indeed, many Nigerians are not smiling. There is no electricity, as power supply to most homes in different parts of the country has dropped. There is no fuel in most parts of the country, as marketers and NNPC are playing hide and seek over the issue with Nigerians. Despite the fact that N3.6 trillion was set aside for fuel subsidy in this year’s budget, petrol is now being sold for between N320 and N500 in most filling stations across the country. In some major retail outlets selling the commodity between N180 and N210, the queue is enough to drive one to the bend. However, the fuel crisis in Abuja suddenly disappeared during the week as most filling stations got the commodity and are selling at the official pump price of between N185 and N195. The magic that was performed in Abuja needs to be replicated in other parts of the country, as it appears to be a clear case of sabotage and greed!

The whole crisis in the country, to many political observers, is surrounding this month’s presidential election and the desperate attempts by some forces to stop a particular candidate from emerging as the next President. It is a fight between two elephants and definitely, the grass in such an arena must suffer. This is the suffering many Nigerians are going through now. No one would have imagined that the CBN’s policy of Naira redesign would come with so much pain, tears and sorrow to the extent that two fully grown angered men could fight over a little misunderstanding in a banking hall to the extent of inflicting bodily harm on each other. In Delta State, a bank customer, after several hours on the queue, slumped and gave up the ghost, leaving his family and loved ones who depend on him to mourn on top of the difficult situation we currently find ourselves.

The tension in the land is so palpable that one can cut it with a knife. As rightly stated in Abeokuta during a political rally, the fuel scarcity, and now the scarcity of the Naira was allegedly orchestrated by those in power to stop Asiwaju Bola Tinubu from emerging as President come May 29. The man himself made the pronouncement recently at a rally. Make no mistake about it, I am not a fan of the former Governor of Lagos state, but to deliberately create problems for millions of Nigerians all in a bid to stop one man from emerging as President is the height of wickedness. The question people are asking is who could be responsible?

The deputy director, banking supervision department, CBN Lagos, Kayode Makinde, alluded to sabotage last Tuesday while monitoring the distribution of the new Naira notes. He pointedly poked fingers at the faces of the commercial banks for sabotaging the efforts of the CBN in making the new naira notes unavailable to Nigerians. Hear him: “This is the third week of ensuring strict implementation of our directive as regards the issuance of new notes. We have banks, agents and super agents circulate new notes in the economy. The experience has been mixed, we saw some trying to hoard new notes, we compelled them to upload into ATM terminals, and others had poor cash management. From our experience, CBN should not be blamed, but commercial banks for the scarcity. We caught some of them with new notes in their vaults, and we compelled them to upload them to their machines. We told them that instead of trying to ration, upload the ones they have and contact your central cash Management unit which has direct access to CBN for more.

‘We came across instances of sabotage on the part of the operators, we will take the case up and they will be dealt with appropriately. We have given a directive that they shouldn’t pay out new notes via the counter but other notes, some of them did that and ran out of cash. Some of the branches deployed resourceful cash management skills and they never ran out of cash while others experience cash run out and are still waiting for their source. We came across one of them that couldn’t account for almost four million naira of new notes and appropriate sanction will be placed on them.’

As expected, many Nigerians hold the commercial banks responsible for the crisis in the management of the new notes. Agreed that there could be a shortfall in what was released by the CBN, it shouldn’t have to be this bad. How did the new notes get to currency hawkers trading it for gains? How did it get to those hawking it at social events? The terrorist with bales of new Naira notes in the bushes, who took it there? Where are the POS operators getting the naira on which they now charge as high as 15 per cent commission instead of the approved 1 per cent? Many of the operators however, said that they had to use the “black market” to get both the old and new notes from “unexpected quarters”, hence their resolve to charge a lot of money from people who were desperate to withdraw cash from them.

Some POS operators now charge as much as N1, 000 or N2,000 to release N10, 000 to users. This should not be so. They were brought into the system to aid it in both rural and semi-urban areas, but they now constitute an issue and need to have their activities regulated.

The total number of POS machines deployed by merchants and individuals across Nigeria is about 1.6 million as at November 2022, according to the data released by the Nigeria Inter-Bank Settlement System (NIBSS).

Emefiele and his officials in the CBN and the federal government must find a way of urgently dousing the tension in the land. God help us all, and heal our land.

Aside that, there are approximately 17 automated teller machines, 147 point-of-sale devices and four bank branches for every 100,000 Nigerians, according to a new report by McKinsey. But poor network and internet access has rendered mobile banking and other channels unattractive to many. Most of these facilities, which were meant to facilitate a gradual transition to a cashless economy in Nigeria were somehow strangulated to the extent that they could not offer the needed services. This has, again, brought to the fore, the argument that Nigerians may not be ripe for a full cashless society as has been canvassed by the CBN. We do not have the resources or the structure in place yet. Ordinary transfer of funds becomes an issue as the network becomes problematic.

Most market women who heeded the CBN’s call to get PoS machines for their operations started complaining that they are losing money due to erratic network, as many customers are not with cash. Imagine buying a pack of sugar for N500 and you have to wait for over one hour just to ensure that the seller gets their money through fund transfer.

Most Nigerians are not comfortable with what is going on in the country. Many are hungry and angry. The CBN and the federal government must design a way of getting cash, whether new or old, into the hands of Nigerians before things get out of hand. We are not at war and there is no reason why people will have money in their bank accounts but cannot access their funds. Emefiele and his officials in the CBN and the federal government must find a way of urgently dousing the tension in the land. God help us all, and heal our land.

See you next week.

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