CEM REPORT, FINANCE | In a groundbreaking move to safeguard the booming mobile money market, Nigeria is deploying a high-tech weapon against fraudsters: AI-powered Point of Sale (PoS) terminals with enhanced Know Your Customer (KYC) capabilities.
This initiative, spearheaded by the Central Bank of Nigeria (CBN) in partnership with the Nigerian Electronic Fraud Forum (NeFF) and the Association of Mobile Money and Banking Agents of Nigeria (AMMBAN), promises to tighten the net around criminals targeting the country’s 1.7 million-plus mobile money agents.
The alarming rise of mobile money fraud in Nigeria has been a thorn in the side of financial inclusion efforts. Scammers often exploit vulnerabilities at agent locations, siphoning off hard-earned cash from unsuspecting customers. This not only casts a shadow over the industry’s credibility but also discourages potential users, hindering financial growth.
“The Nigerian Electronic Fraud Forum was established precisely to address such challenges,” explains Lilian Phido, head of corporate communications at NIBSS. “By bringing together key stakeholders, we can foster proactive solutions that safeguard the integrity of payment systems nationwide.”
AI-Powered PoS Terminals
The new AI-powered feature on PoS terminals aims to be a game-changer. Before completing certain transactions, the system will prompt agents for specific KYC details, raising red flags for suspicious activity. This proactive approach empowers agents to become the first line of defence against fraud, protecting both themselves and their customers.
“This collaboration is nearing fruition,” reveals Fasasi Sarafadeen Atanda, President of AMMBAN. “We’re finalizing the technical aspects and activating features that will make PoS terminals more secure. We’re also grateful for NIBSS’s instrumental role in driving this initiative forward.”
“We anticipate launching this feature in the first quarter of 2024,”
This swift timeline is a testament to the collaborative spirit driving the initiative.
The impact of this initiative goes beyond just enhanced security. It represents a significant step towards formalizing the mobile money agent sector. The collaboration between AMMBAN and NIBSS will establish a common identification system for all agents, bringing much-needed order to a previously informal landscape.
But the fight against fraud doesn’t stop at the PoS machine. A team effort is brewing, with a coalition of security agencies like the Nigerian police and the Department of State Services (DSS) joining forces with AMMBAN and NIBSS. Their mission? To create a unified identification system for the over 1.7 million banking agents in Nigeria. Think of it as a national ID for the corner shop heroes who keep our cash flowing.
This comprehensive approach is crucial, considering the sheer scale of the problem. According to a recent report by the Nigeria Electronic Fraud Forum, electronic fraud losses in the country amounted to a staggering N9.5 billion in just the first seven months of 2023. That’s enough to make anyone want to tighten their financial belt.
However, some stakeholders remain cautious about the prospect of mandatory agent training and certification. Concerns have been raised about the potential burden this could place on already struggling agents. Finding the right balance between security and practicality will be crucial in ensuring the initiative’s long-term success.
The fight against mobile money fraud is not a one-off battle. This initiative represents a continuous evolution in Nigeria’s efforts to secure its digital financial ecosystem. With its focus on cutting-edge technology, collaboration, and formalization, it offers a promising glimpse into a future where mobile money thrives, secure and accessible for all Nigerians.
