Experts and stakeholders in Nigeria’s payment industry have called for concerted efforts to mitigate the growing menace of digital frauds.
They submitted that cyber fraud has been evolving, with attacks growing in sophistication and scope, making securing payments and preventing fraud a top priority.
The experts, who gathered at the forum organised by Businessday Media, tagged ‘Future of Payment and Fraud Conference 2022,’ in Lagos, also spoke on the evolution of payment technology, existing payment trends, future of payments, and recurring fraud issues. They also deliberated on relevant solutions.
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, said the digital payment system is vulnerable to fraud and evidence of this abound everywhere, with cybercrimes such as cyberstalking, cybersquatting, phishing, among others, leading the pack.
Olatoye said the report had it that identity fraud global losses totaled $52 billion in 2021, stressing that there are, however, a plethora of existing Nigerian laws having provisions capable of helping to mitigate fraud.
According to him, these include Cybercrime (Prohibition, Prevention) Act 2015; Central Bank of Nigeria Act; Economic and Financial Crime 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 are 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 said law could be used to proffer solutions, stressing that effective regulation is required. He said registration/licensing of e-payment platforms/the Fintechs and effectively regulating them; KYC requirement/supervision, S.37 cyber crime Act 2015.
Olatoye said data protection must be robust; stressing 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 organisation complies with data protection laws and regulations.
Olatoye said regulation of crypto-currency is required, stressing that the SEC is currently working with CBN on crypto trading regulation.
Mitigating the impacts, the Law Professor recommended that there is a 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 users. He said there should be digital payment risk insurance in Nigeria as seen in the USA, adding that online safety law is also required as seen 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 said there is a 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.
Speaking on the topic, ‘Contactless as the future of Payment in Africa,’ Country Manager of Visa Nigeria, Andrew Uaboi, said that contactless payment is the next frontier in the Nigerian Fintech and payment ecosystem.
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 will enable the growth of small businesses and also assist individual businesses thrive.
He revealed that Nigerians are expected to tap the full potential of the coming innovation, which will bring more merchants into the financial ecosystem.
“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’ve 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,” Andrew said.
He urged Nigerians to leverage the opportunity that is coming in changing their business and the economy at large.
Uaboi further explained that Visa is working with the Nigerian government, Central bank and other partners to build a framework for which contactless will come in and thrive in Nigeria.
In a separate remark, the Managing Director of Interswitch, Hakeem Lawal, said that while support from overseas is important for payment penetration in Africa, the development of Africa’s payment system is 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.