E-payments and e-commerce have rapidly expanded in recent years due to demographic trends and the increasingly higher levels of internet penetration. Since the cashless policy was first introduced by the CBN in 2012, the country’s financial system has consistently witnessed remarkable success through its online and mobile payment structure. With e-commerce penetration at 37% in both Nigeria and South Africa, and at 25% in Kenya, the potential for significant growth in Nigeria, especially with its massive youth demography, is telling.
But are we really out of the woods? With the surge in online transactions, the NIBSS also reported that fraudsters attempted attacks 46,126 times and were successful on 41,979 occasions, 91% of the time. Consequently, Nigerian financial services companies lost ₦5.2 billion to fraud between January and September 2020. This was a 510% increase from the ₦550 million lost to fraudsters in the same period in 2019. What is the effect of the pervasive electronic banking fraud on the customers and their interests in online payments?
Among the focus group, all between 18-45 years, 100% claim to own personal bank accounts. 93% of the respondents claimed to have used an e-payment or e-transfer option at one point, while 65% claimed to have used it because it was the only option made available to them. On whether they were registered to access internet banking options, 25% said they registered to improve their payment options, 60% said they did not, while 15% were uncertain that they registered for online banking services.