Although Central Bank of Nigeria (CBN) data shows Internet based transactions increased in both volume and value in 2015 compared to the previous year’s figures, the pace of growth could have been higher if fraudulent activities are effectively addressed, analysts at FBN Quest have said.
In a note obtained by New Telegraph, the experts stated: “The volume and value of web-based transactions increased by 50 per cent y/y and 29.6per cent y/y respectively when compared with the corresponding period in 2014, to 3.3 million and N39.8billion respectively.
This was due to increased awareness and acceptance of web payment. “According to the Nigerian Communications Commission, Internet subscriptions stood at 94 million in September 2016.
This translates to Internet penetration of 51per cent. That said, we suspect the volume of transactions on the web payment platforms could accelerate exponentially if fraudulent activities are curbed.”
A global financial risk outlook published recently indicates that half of active Internet users are “very” concerned about the potential fraud risk of making an online transaction.
Indeed, figures released by the Nigeria Interbank Settlement System (NIBSS) show a rising trend in electronic fraud. In 2013, NIBSS revealed that 822 cases of electronic fraud were recorded with an attempted value of N19.15 billion, while tactual loss stood at N485.19 million.
Similarly, the agency stated that reported cases of fraud rose by 78 per cent in 2014 to 1,461, while the actual loss was N6.216 billion. Although the rate of fraud reduced in 2015, the figures still bother industry stakeholders.
Specifically, for 2015, about 946 attempted e-fraud cases were recorded on the networks of banks, Other Financial Institutions (OFIs) and Mobile Payment Operators (MPOs), resulting in a loss of N5 billion, compared with N6.216 billion recorded in 2014.
Interestingly, the fear of fraud does not seem to be affecting patronage of Automated Teller Machines (ATMs) as CBN data reveals that the machines remained the most patronised e-payment channel within the first half of 2016, accounting for 84.8per cent of total transactions.
In terms of value, ATM also accounted for the lion share, or 81.5per cent, the apex bank stated, adding however, that despite the increase in the value of ATM transactions, the number of ATMs nationwide declined by 1.5per cent y/y to 15,699 in H1 2015