Experts and stakeholders in Nigeria’s electronic payment industry have called for formidable efforts to curtail the growing menace of digital frauds.
The experts, who gathered at the forum organized by the Businessday Media, tagged ‘Future of Payment and Fraud Conference 2022,’ in Lagos State, Nigeria spoke on the evolution of payment technology, existing payment trends, future of payments, and recurring fraud issues, among sundry issues.
They submitted that cyber fraud had been evolving, with attacks growing in sophistication and scope, thereby making payments’ security and prevention of electronic frauds top priority.
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Speaking on the ‘Role of Law in Mitigating Fraud in the Digital Payments System’, Prof. Kareem Olatoye of the Faculty of Law, Lagos State University (LASU), Ojo, opined that the digital payment system was vulnerable to fraud and evidence of this abound everywhere, with cybercrimes such as cyberstalking, cybersquatting, and phishing, among others, leading the pack.
Olatoye said the report had it that identity fraud global losses totalled $52 billion in 2021, stressing there were, however, a plethora of existing Nigerian laws having provisions capable of helping to tackle electronic fraud.
According to him, these include Cybercrime Prohibition and Prevention Act 2015; Central Bank of Nigeria Act; Economic and Financial Crimes Commission Act 2004; Money Laundering (Prohibition) Act 2012; the Advanced Free Fraud and Other Fraud Related Offences Act 2006; the Communications Act 2003; Nigeria Deposit Insurance Corporation Act; Evidence Act 2011; Criminal Code Act 1990; the Penal Code 1990; Companies and Allied Matters Act 2020.
Others were the Constitution of the Federal Republic of Nigeria 1999; the Trademarks Act 2004; Anti-Corruption Act; Bank Employees, etc (Declaration of Asset) Act; National Drug Law Enforcement Agency Act and Special Tribunal (Miscellaneous Offences) Act.
The Law professor stated that law could be used to proffer solutions, stressing effective regulation was required. Having mentioned data protection must be robust, he stressed that S.6 NITDA Act enables regulating electronic data interchange.
According to him, under the NDPR, a data controller company must appoint a Data protection officer who must ensure the organization complies with data protection laws and regulations.
Olatoye informed the audience that regulation of crypto-currency was equally required, hinting that the SEC was currently working with CBN on crypto trading regulation.
Mitigating the impacts, the Law professor recommended there was need for law mandating payment software developers/owners to ensure security of the payment system against hacking and other abuses that could result in financial loss to the users.
He expressed there should be digital payment risk insurance in Nigeria as seen in the USA and other developed countries, adding online safety law was also required as seen in the United Kingdom online safety bill (s.36), which imposes duty of care to offer protection where criminals impersonate to steal people’s personal data or break into bank accounts.
He further opined there was need to place and enforce the legal burden on anyone carrying on business using Internet-enabled platforms to take responsibility for the safety of customers making digital payments.
“Adequate punishment for cybercrime and effective implementation. Digital Infrastructure needs to be robust. Online policing /monitoring of financial transactions, international cooperation are needed.” he stressed.
On his part, the Country Manager of Visa Nigeria, Andrew Uaboi, who spoke on the topic, ‘Contactless as the future of Payment in Africa,’ disclosed that contactless payment was the next frontier in the Nigerian Fintech and payment ecosystem.
It’s noteworthy that contactless payment is a means of payment that does not require cash or even swiping a card. It requires tapping or holding the contactless card or smartphone near a compatible card reader while checking out.
According to him, the innovation would enable the growth of small businesses and also assist individual businesses to thrive, revealing that Nigerians were expected to tap the full potential of the coming innovation, which would bring more merchants into the financial ecosystem.
He said, “There has been a significant increase in contactless payment since the COVID-19 era. In the U.S for example, one in six people testified that they carried out their first contactless payment during the COVID-19 last year. We have also seen a 40 per cent year on year growth of contactless payment, and all of this payment is also enabling small businesses. It enables the growth of individual businesses as well as economies.”
He therefore urged Nigerians to leverage the opportunity that is coming in changing their business and the economy at large.
Uaboi further explained that Visa was working with the Nigerian government, CBN and other partners to build a framework for which contactless would come in and thrive in Nigeria.
Speaking further, the Managing Director of Interswitch, Hakeem Lawal, disclosed that while support from overseas was important for payment penetration in Africa, the development of Africa’s payment system was largely in the hands of Africans via participation, policies and tailor-made solutions to address the needs. He said it was evident in the penetration of Mobile Money in Sub-Saharan Africa and the wide spread of online real-time funds transfer in Nigeria.
It’s indeed high time the relevant authorities in Nigeria stepped up mechanisms in ensuring electronic transactions become safer and reliable within the shores of the country.
This can only be achieved by tightening regulation that controls the overall activity regarding digital banking. The operators and entrepreneurs in the industry ought to also be regularly trained and retrained. Among all, prosecution must be taken seriously to serve as a deterrent to the upcoming fraudsters.