Interswitch: Banks Lost N12.2bn to Electronic Fraud in 6 Months

James Emejo in Abuja

The banking industry lost N12.2 billion to electronic payment fraud in the first half of the year (H1 2023), Interswitch has revealed.

The payment processing company also said N35 billion fraud attempts were recorded in 2022, out of which N14.3 billion was actually lost.

The company’s Head, Retail Payments, Interswitch, Suzan Fasipe disclosed at the Techconnect 3.0 event in Abuja.

She said 58 per cent of fraud losses in 2022 was perpetrated through the mobile, web and POS channels which amounted to N8.3 billion.

Fasipe said 37 per cent of banks fell prey to some forms of ransomware attack between 2021 till date.

The development particularly highlights the increasing security challenges that the banking industry is grappling with amid efforts to deepen the digital payment infrastructure.

The company also said 93 per cent banking-related fraud occurred through online transactions.

It said at some instances, a chargeback fraud, which occurs when a consumer makes an online shopping purchase with their own credit card, and then requests a chargeback from the issuing bank after receiving the purchased goods or services – could go undetected by banks for six months.   

Once approved, the chargeback cancels the financial transaction, and the consumer receives a refund of the money they spent, and dependent on the payment method used, the merchant can be accountable when a chargeback occurs. 

Fasipe also said corporate fraud, which results from weak internal controls accounted for 96.2 per cent of electronic payment fraud.

She added that four banks lost N1.77 billion to fraudulent activities involving their employees and consumers in 2021.

In her presentation, Fasipe, nonetheless, offered practical hints towards fortifying existing solutions to curb fraud incidents, safeguarding consumers’ sensitive data, and navigating emerging industry trends.

The event served as an instrumental platform for robust discussions on financial inclusion strategies and the pivotal role of regulators in advancing digital financial inclusion.

The company also appreciated its devoted and reward outstanding customers, demonstrating its unwavering commitment to nurturing enduring partnerships and fostering growth within the digital payment ecosystem.

Interswitch’s dedication to shaping a more inclusive financial landscape through mobile payments reverberates not only across the African continent but also on the global stage.

The company’s visionary leadership stands as a beacon of inspiration for the financial industry, illuminating a path toward broader financial inclusion and economic empowerment for all.

It further reiterated its commitment to advancing financial inclusion, using the transformative power of mobile payments not only within Nigeria but across the entire African continent.

The company’s Regional Head, Northern Business, Thomas Eze, stressed the urgent need to unlock the full potential of mobile payments to orchestrate a more inclusive economy.

He highlighted the profound impact of digital solutions to bridge the financial services divide, especially in underserved areas, ultimately assimilating marginalized communities into the formal economy and boosting economic growth.

He said the empowerment of Nigerians and Africans in general remained at the forefront of the company’s interventions.

Eze emphasized the consistent success of Interswitch’s innovative products especially Verve and Quickteller, lauding them as champions of financial inclusion and prosperity.

He said, “In an era defined by technological prowess and innovation, mobile payments serve as the gateway to financial inclusion. Interswitch has tirelessly championed this transformative journey, furnishing tailor-made payment solutions that empower small and medium-sized enterprises to partake in the digital economy.

“Our mission is clear – to democratize access to financial services, and our dedication to this mission remains steadfast.”

While emphasizing collaboration among stakeholders, he said stressed the potential of a financially inclusive economy through mobile payments.