The Guardian (Nigeria)

‘ How to mitigate fraud in digital payments system’

- By Isaac Chibuife

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.

Olato ye 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 COVID19 era. In the U. S for example, one in six people testified that they carried out their first contactles­s payment during the COVID19 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.

 ?? Source: Global Banking & Finance Review ??
Source: Global Banking & Finance Review

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