Several Nigerian payment industry professionals and stakeholders have called for a joint effort to fight the increasing threat of digital fraud. Cyber fraud has grown in sophistication and reach, making safeguarding payments and avoiding fraud a critical responsibility.
The panellists at Businessday Media’s ‘Future of Payment and Fraud Conference 2022,’ held in Lagos, Nigeria, discussed a variety of topics, including the advancement of payment technology, current payment patterns, the future of payments, and the recurrence of fraud. In addition to this, they discussed viable solutions.
Prof. Kareem Olatoye of the Faculty of Law, Lagos State University (LASU), Ojo, spoke on the ‘Role of Law in Mitigating Fraud in the Digital Payments System.’ He asserted that the digital payment system is vulnerable to fraud, with cybercrimes such as cyberstalking, cybersquatting, and phishing, among others, leading the pack.
Olatoye claimed identity fraud global damages totalled $52 billion in 2021, but Nigerian legislation can assist in reducing fraud. He mentioned the Cybercrime (Prohibition and Prevention) Act of 2015, the Central Bank of Nigeria Act, the Economic and Financial Crime Commission Act of 2004, the Money Laundering (Prohibition) Act of 2012, the Advanced Free Fraud and Other Fraud-Related Offences Act of 2006, the Communications Act of 2003, the Nigeria Deposit Insurance Corporation Act, the Evidence Act of 2011, the Criminal Code Act of 1990, the Penal Code of 1990, and the Companies and Allied Matters Act of 2020 as notable policies that can help reduce the impact of digital fraud.
Other laws include the 1999 Constitution of the Federal Republic of Nigeria, the Trademarks Act of 2004, the Anti-Corruption Act, the Bank Employees, etc. (Declaration of Assets) Act, the National Drug Law Enforcement Agency Act, and the Special Tribunal (Miscellaneous Offences) Act.
The Professor of Law argued that the law may be used to provide remedies and emphasized the need for good regulation. He stated that registration and licensing of e-payment platforms/Fintechs and their effective regulation; KYC requirement and supervision, Section 37 of the Cybercrime Act of 2015,
Olatoye stated that data protection must be comprehensive, highlighting that Section 6 of the NITDA Act permits the regulation of electronic data interchange. According to him, a data controller company is required by the NDPR to establish a data protection officer responsible for ensuring compliance with data protection laws and regulations. He stated that cryptocurrency regulation is necessary and added that the SEC is currently collaborating with the CBN on crypto trade regulation.
In order to mitigate the effects, the Law Professor suggested enacting legislation requiring payment software developers/owners to safeguard the security of the payment system against hacking and other abuses that could result in monetary loss to users. He stated that there should be digital payment risk insurance in Nigeria, as is the case in the United States, and that an online safety law is also required, similar to the United Kingdom’s online safety bill (s.36), which imposes a duty of care to offer protection in situations where criminals impersonate to steal personal information or break into bank accounts.
He stated that everyone conducting business using Internet-enabled platforms must have legal responsibility for the protection of clients making digital payments and that this obligation must be enforced. Adequate cybercrime penalties and successful implementation. “The digital infrastructure must be solid,” he added, while emphasising the need for online policing/monitoring of financial transactions and international cooperation.
On the subject of ‘Contactless as the Future of Payment in Africa,’ Andrew Uaboi, Country Manager of Visa Nigeria, stated that contactless payment is the next frontier for the Nigerian Fintech and payment ecosystem. Contactless payment is a payment method that does not require cash or card swiping. At checkout, the contactless card or smartphone must be tapped or held near a suitable card reader. He stressed that this innovation is going to help small businesses grow and also help individuals succeed in business.
Uaboi also disclosed that Nigerians are anticipated to maximise the potential of the forthcoming innovation, which will attract more merchants to the financial ecosystem. Since the COVID-19 era, there has been a substantial surge in contactless payments. During COVID-19 last year, one in six people in the United States reported making their first contactless payment. We’ve also witnessed a 40 percent year-over-year increase in contactless payments, all of which benefits small companies. “It facilitates the expansion of both enterprises and economies,” Andrew stated. He urged Nigerians to take advantage of the forthcoming chance to transform their businesses and the economy as a whole.
Uaboi added that Visa is collaborating with the Nigerian government, Central bank, and other partners to develop a framework for the introduction and growth of contactless in Nigeria.
In a separate remark, the Managing Director of Interswitch, Hakeem Lawal, stated that while assistance from abroad is essential for payment penetration in Africa, the development of Africa’s payment system is largely in the hands of Africans through participation, policies, and custom-tailored solutions to meet their needs.
